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Apr-19-2008EBay Profit Increases on New Selling Fees, PayPal Revenue(topic overview)
CONTENTS:
- Excluding one-time items, eBay's net income was $562 million, or 42 cents per share, compared with $460 million, or 33 cents per share, in the first quarter of last year. (More...)
- Operating margin came in as expected at 32% in the quarter, 160 basis points lower than last year, primarily due to a business mix shift towards our higher growth but lower margin PayPal and Skype businesses, and higher litigation expenses. (More...)
- First I want to summarize our overall financial results from the quarter. (More...)
- The number of active eBay users, which analysts follow closely, increased only 1 per cent from the past quarter, to 83.9 million. (More...)
- Online auction company eBay beat analysts' expectations, reporting a 22 percent increase in first-quarter profit. (More...)
- Ebay began acknowledging as much in October when it wrote down $1.4 billion from the value of the business. (More...)
- The number of eBay stores dropped sharply in the middle of last year when eBay raised seller fees. (More...)
- While there is still a lot more work to do, I am confident that eBay is reinventing itself in exhilarating new ways that will strengthen the growth of our business and lead to an even more exciting future. (More...)
- Halliburton is mulling a counterbid for Britain's Expro International, sources close to the situation said on Friday, after the oil services company agreed to accept a 1.605 billion pound ($3.17 billion) bid from funds managed by private equity firm Candover and investment bank Goldman Sachs. (More...)
- John, I think eBay is an investor of a company called and they had some great success with the installment payment on market platform. (More...)
- Net revenues generated outside the U.S. were 55% of total Marketplaces net revenues for the quarter. (More...)
- Obviously we have been doing better marketing on the site. (More...)
- All in all, we delivered strong financial performance for the quarter and feel good about the solid start to 2008. (More...)
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Excluding one-time items, eBay's net income was $562 million, or 42 cents per share, compared with $460 million, or 33 cents per share, in the first quarter of last year. On that basis, analysts polled by Thomson Financial expected, on average, earnings of 39 cents per share on revenue of $2.08 billion. More than half of eBay's business — including its core online auction, fixed-price and store listings, PayPal, Skype and classifieds — takes place overseas. [1] For 2008, eBay expects adjusted earnings of $1.70 to $1.75 a share and revenue of $8.7 billion to $9 billion, compared with analyst projections for earnings of $1.68 a share and revenue of $8.79 billion. Adjusted operating margin for the first quarter was 32%, down from 33.6% a year ago, because of faster growing lower-margin businesses such as PayPal and Skype.[2]
Giving more weight to buyer ratings is having an effect, Donahoe says. Donahoe called the first three months of 2008 'a strong financial quarter for eBay' despite economic weakness in the U.S. and U.K. that reduced sales in those markets. The total value of goods sold on eBay worldwide grew 12% to $16.0 billion in the first quarter of this year from $14.3 billion in the first three months of 2007. Revenue from the company's Marketplaces segment'which includes eBay, comparison shopping site Shopping.com, online ticket seller StubHub and other properties'increased 19% to $1.48 billion in the first quarter from $1.25 billion a year ago. 55% of this year's revenue was from international operations, compared with 51% in Q1 2007.[3] The weakness of the dollar has been a big advantage for eBay in recent months. The auction site reports its results in dollars, but makes most of its money outside the U.S. - so because the greenback's currently worth so little against other major currencies, all eBay's non-US sales translate into more dollars than they would have done in previous years. With international sales rising by almost a third, this boosted revenues by more than $100m - a nice reward for doing nothing. As a result of all this good news, eBay is raising its forecasts both for the coming quarter and the rest of the year: it now expects to make just over $2.1bn in the next three months, and somewhere between $8bn and $9bn for the year as a whole. That said, this year's unlikely to be completely plain sailing. Even if eBay's got less to fear than most from an economic slowdown, it's still being threatened with various lawsuits from luxury brands, who are claiming that it doesn't properly monitor the sale of fake goods on its site. There's the ongoing problem of what to do with Skype - the internet telephony division actually saw revenues jump 61% last quarter to $126m, but it's still a long way from justifying its astronomical price tag. Donahoe has clearly steadied the ship, given that the share price is up by almost a quarter since his appointment - but he's going to have a hard job maintaining that kind of progress.[4]
Analysts forecast full-year revenue of $8.74 billion and earnings of $1.66 a share. The company's stock took a hit in January when its guidance fell below Wall Street estimates. Some analysts have expressed concern over the possible impact of eBay's new policies, which in part lower the fees sellers pay to list their auction items on the site but raise the commission charged by eBay if a sale goes through.[5] Amazon's operations are consolidated under one corporate structure; eBay is composed of millions of individual retailers with hardly a consistency among them, and as more shoppers head online, that could be a key differentiator for investors. In the meantime, eBay is also facing continuing pressure from its very lifeblood: the power sellers who compose most of the sales volume on the site. EBay said in January it would dramatically restructure its fee plans, reducing listing charges by up to 50 percent, but increasing the commission it collects on items that sell. As you might expect, those big eBay sellers weren't happy, and to respond, the company reduced listing fees again. There's still a lot of dissention and eBay continues to try to walk that fine line between corporation beholden to shareholders, and online community catering to its members. This time around, analysts are expecting 39 cents a share on revenue of $2.08 billion, at the high-end of the range eBay offered back in January. Some of that optimism comes on the back of a weakened dollar since eBay generates better than half its sales from overseas clients. That bodes well for the company especially as recession worries continue to dog tech companies in this country.[6]
In the year-ago period, eBay earned $377 million, or 27 cents a share, on revenue of $1.77 billion. More than half of eBay's business -- including its core online auction, fixed-price and store listings, PayPal, Skype and classifieds -- takes place overseas.[7] Analysts were predicting adjusted-earnings of 39 cents per share and revenue of $2.08 billion, according to Thomson Financial. EBay attributed the results to the weak dollar as well as increased revenue for its PayPal, Skype and global classifieds businesses. The San Jose-based company posted its first-quarter earnings shortly after Wednesday'''s closing bell.[8] EBay Inc.' s first-quarter profit climbed 22% and revenue increased 24%, propelled by its PayPal electronic-payments unit and some nonauction businesses, though the company still faces challenges in reversing slowing growth at its auction unit. The San Jose, Calif., Web giant also raised its forecast for 2008 revenue and earnings, surpassing current Wall Street estimates. It expects revenue for the full year of $8.7 billion to $9 billion, up from the mean forecast by analysts surveyed by Thomson Financial of $8.79 billion. It also said it.[9] The Internet telephony service Skype, which eBay acquired in October 2005, generated $115 million in revenue in the fourth quarter, up 76% from the previous year. Skype and PayPal don't generate the same profit margins as the core auctions business, which has led some to worry that eBay will be unable to retain its historic levels of profitability. Several analysts believe a better-than-expected quarter is a given, since eBay offered what many considered to be lowball outlook during its most recent earnings report.[10]
MaineCoasts writes "The Financial Times reports that Ebay's new CEO is evaluating a sale of Skype if new ways cannot be found for the fast-growing service to support its core e-commerce business. Ebay reported earlier this week that Skype had a 61 percent increase in first quarter revenue over the same quarter last year and now has 309 million users worldwide."[11] The online auction site bought Skype, the internet telephony service, for $2.6 bn (about £1.4bn) in 2005 with the intent of using it to facilitate the sale and purchase of goods online. Skype has not lived up to its owner's expectations. eBay wrote off $1.39bn for the telephone service last year, which has 309 million registered users, far more than eBay's 83.9 million users. Chief executive of eBay, John Donahoe, said the company will consider selling its Skype internet phone unit at the end of the year if it can't find ways to use the service to support its core business, namely trading goods online.[12] As John Donahoe takes over as chief executive of eBay, the company is still struggling to improve its business. The company, which has been refocusing its business, reported that net income in its first quarter rose 22 per cent to $US562 million ($603 million), or US42 a share, from the same period last year.[13] Online auction house eBay Inc. on Wednesday reported a 22 percent boost in first quarter net income to $460 million, or 34 cents a share, compared to $377 million, or 27 cents a share in the same period last year.[14] The auction giant reported first quarter net income of $460 million, or 34 cents a share, on revenue of $2.19 billion, up 24 percent from a year ago.[15]
Gross merchandise volume was $16.04 billion for the quarter, an increase of 12% over the first quarter of 2007. Marketplace Net Transaction Revenue = $1.267 billion, Marketplace Marketing Services and Other Revenue = $216 million (a 56% increase year over year) = $1.48 billion in total Marketplace revenue. I wish eBay broke out its ad revenue numbers. John Donahoe said on the conference call that ad revenue was up 151%, I need to check this on the transcript. This reclassification is interesting.[16] Online marketplace provider eBay (EBAY) exceeded analysts' expectations with a 22% increase in its first-quarter results and also increased its full-year outlook. EBay posted adjusted-earnings of $562 million, or 42 cents per share in its first quarter, compared to $460 million, or 33 cents per share a year ago.[8] Add it up and Squali figures eBay will get a revenue boost of about $87 million from a year ago. Citigroup analyst Mark Mahaney said he expects eBay to report better than expected first quarter results.[17]
PayPal registered strong growth, with revenue increasing 32% from $439.3 million in the first Quarter of 2007 to $581.6 million in the latest quarter. PayPal acts as a payment processor for online retailers and non-eBay payments processed by PayPal shot up 61% to $6.6 billion in the first quarter of this year from $4.1 billion in the prior year quarter. 31 of the top 100 U.S. online retailers now use PayPal as their payment processor, noted chief financial officer Robert H. Swan.[3] Two tech bellwethers showed on Apr. 16 what it takes to shrug off the U.S. economic slump: international exposure and a weak U.S. dollar. IBM ( IBM ), a global seller of software and computer services, and eBay ( EBAY ), the online shopping giant, both released first quarter results that exceeded analysts' expectations and raised respective forecasts for this year's financial performance. In both cases, sluggish U.S. gains were offset by faster growth abroad, allaying concern over how well tech titans can weather the storm.[18]
The website's first quarter profits rose 22% to $562m in the first three months of 2008, beating analysts' estimates. It is understood that Donahoe, who joined in January, is putting everything Ebay does up for review and may sell internet calling service Skype to search engine Google. Donahoe says he wants the site to operate "less like an unruly flea market and more like a strip mall", so buyers will be guaranteed a more comfortable and predictable shopping experience. He has already introduced changes such as favouring the big, reliable sellers, angering the smaller sellers who make a living of selling things from home.[19] "EBay Inc., the world's largest Internet auctioneer, posted first-quarter profit that beat analysts' estimates on increased selling fees and higher revenue from its PayPal payment service." Its amazing how every year its another raise in fees - more nickel and diming to death and then a great looking quarter. Its like a house of cards ready to blow over. They don't claim new buyers have been lured to the site and they don't confess that many sellers are leaving every day. Unless they do something drastic, fair and above board, its only a matter of time.[16] While the changes generated some initial complaints among the company's seller base, analysts says the adjustments have led to an overall increase in listings on the site. "We believe that eBay's increased fee structure was implemented early enough in the quarter to move regular auction revenues and margins upwards, and this should have an even greater impact later in the year when the benefits feed through the stores business," Jeff Lindsay of Bernstein Research wrote in a report Tuesday.[10]
"We believe shares are attractive at current levels." James Mitchell, an analyst for Goldman Sachs, expects eBay to post first quarter results above its own guidance as well as Wall Street's consensus. In his research from earlier this month, he wrote that the company should see stabilization and perhaps improvement in its gross merchandise volume, or the total value of all successfully closed listings on eBay's trading platforms. Mitchell said he is a little more confident about eBay's gross merchandise volume having spoken with sellers, who have noticed an increased supply of listings because of the lower fee they must pay upfront. He noted that although a flood of listings might dilute the conversion rate to sales, eBay can alleviate some of that with its new gallery option that allows sellers to post photos of their items for free instead of a charge.[5] Sales rose 24 percent from the year-earlier quarter to $2.19 billion, beating estimates. "This was a very strong financial quarter for the company," eBays chief executive, John Donahoe said in a statement. EBay also raised its 2008 outlook, projecting sales of $8.7 billion to $9 billion and earnings per share of $1.70 to $1.75, excluding special charges. In January, it forecast its earnings per share of $1.63 to $1.67 on sales of $8.5 billion to $8.7 billion.[20] The mean per-share earnings estimate of analysts polled by Thomson Financial was 39 cents on revenue of $2.08 billion. "This was a very strong financial quarter for the company," said eBay Chief Executive John Donahoe.[21] EBay's performance in the quarter was above the expectations of Wall Street analysts, who had predicted net income of US39 a share on revenue of $US2.08 billion, according to a survey of analysts by Thomson Financial. "This was a very strong financial quarter for the company," said John Donahoe.[13]
EBay reported net income of $460 million, or 34 cents per share, on revenue of $2.19 billion in the quarter that ended March 31.[1] The San Jose online auction company reported net income of $460 million (34 cents per share) on revenue of $2.19 billion in the quarter that ended March 31.[22]
"What is negative is the fact that GMV growth did not accelerate, so people wanted to see that 12 percent growth go to 14 or 15 percent growth, and it didn't get there even with a lot of currency help." The San Jose-based company also raised its outlook for the current quarter, for revenue between $2.1 billion and $2.15 billion, with earnings per share between 30 cents and 32 cents.[1] For the second quarter, eBay forecast revenue $2.1 billion to $2.15 billion with earnings, excluding charges, in the range of 39 cents to 41 cents a share.[23]
Gross merchandise volume increased 12% to $16.04 billion during the quarter. "StubHub had a great quarter, grew very fast and had a higher take rate (percentage equivalent of gross merchandise value that eBay earns in revenue) than the rest of our business so that helped overall numbers," CEO John Donahoe told analysts in his first earnings call since taking over the top job earlier this month.[23] San Jose, CA (AHN) - Online auction giant eBay reported first quarter profit rose 22 percent to $459 million and revenue rose 24 percent to $2.19 billion.[24] Donahoe also told the paper that "Skype is a great standalone business". It is expected to make a profit this year on revenues of $500m and more than 300 million users. Donahoe also moved to squash rumours that eBay could sell off PayPal - such a move might be good for PayPal, which increasingly gets revenues from elsewhere but also provides better margins for eBay whenever it is used on the auction site.[25] EBay wrote off $US1.39 billion ($A1.48 billion) for Skype in October, Bloomberg financial news service reported. More than 309 users have registered with Skype, which generated revenues of $US500 million ($A533.9 million) this year.[26]
We are providing a slide presentation to accompany Bob'''s commentary during the call. This conference call is also being broadcast on the Internet and both the presentation and call are available through the investor relations section of the eBay website, investor.ebay.com. Before we begin, I would like to remind you that during the course of this conference call, we may discuss some non-GAAP measures in talking about our company'''s performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the slide presentation accompanying this call. Our actual results may differ materially from those discussed in this call for a variety of reasons, including our increased need to grow revenues from existing users in established markets, an increasingly competitive environment for our businesses, the complexity of managing a growing company with a broad range of businesses, regulatory tax, as well as IP and other litigation risks, including risks specific to PayPal and the financial industry and risks specific to Skype's technology and to the VOIP industry, our need to upgrade our technology and customer service infrastructure to accommodate growth at reasonable cost while adding new features and maintaining site stability, foreign exchange rate fluctuations, changes in political, business, and economic conditions, and the impact of integration of recent and future acquisitions.[27] Skype posted total revenue of $126 million for the quarter, an increase of 61% over last year. We also saw Skype's key user metrics improve significantly, particularly the number of active users and the volume of both Skype to Skype and Skype out minutes. More people then ever are using Skype to stay connected with their friends and family around the world. Other highlights from across the company include our classifieds business, which had very strong user growth and revenue growth at 60% from the same period last year.[27] The company is finally seeing some growth in internet phone service Skype, the purchase of which many analysts branded a costly mistake. It contributed strongly to this quarter with $126m (£63.8m) in revenue, 61% growth from this time last year due to increased selling fees and higher revenue.[28]
EBay said revenue climbed 24 per cent to $US2.19 billion from the same period a year ago. Its operating margin fell to 32 per cent from 33.6 per cent last year as lower-margin businesses, including payment service PayPal and internet calling service Skype grew quickly.[13] "What we know is, Skype is a great stand-alone business," Ebay's CEO said. Its revenues this year are set to top $500m and the service will be profitable, he added. In the FT story, Donahoe addresses speculation over eBay spinning off PayPal as well, citing the advantages of the company for eBay and saying that they'd be together "for many years."[29] Incoming eBay CEO John Donahoe has set a deadline at the end of this year to determine whether to keep Skype, the Internet phone service the company bought for $2.6 billion in 2005, according to the Financial Times. "What we're testing this year are the synergies," Donahoe told the Financial Times "If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it."[30] EBay Inc is considering selling its Skype internet telephone division unless it can be combined with other units, the company said. EBay will review Skype this year to see if it is helping its online auction and PayPal systems, eBay Chief Executive John Donahoe told Britain's Financial Times.[26] Just a couple weeks ago, there were rumors running around that Google was looking to buy Skype off eBay--er, from eBay. While that rumor hasn't materialized (yet), eBay has now admitted that they may sell off Skype later this year. The Financial Times is reporting that eBay CEO John Donahoe would be willing to part with the P2P/VoIP company if they couldn't find a way to integrate it with their core eCommerce business.[29] As it stands, though, Skype has little to do with eBay's core business, and so it may get sold in the relatively near future. "What we're testing this year are the synergies," said John Donahoe, eBay's new CEO, to the Financial Times.[31]
NEW YORK (Reuters) - EBay (EBAY.O: Quote, Profile, Research ) Inc will think about selling its Skype unit at the end of the year if it cannot find ways to make the Internet phone service aid its main online auction business, the Financial Times reported.[32]
EBay bought Skype, which processes phone calls over the internet at great savings compared to cell and land phone lines, for $US2.6 billion ($A2.78 billion) in 2005. The online auction company had intended to put Skype to use in selling goods online, but EBay said last year already that the phone service was not measuring up to those expectations.[26] The auctioneer bought Skype, which enables users to make calls over the Internet, for $2.6 billion in 2005 with the intent of using it to facilitate the sale and purchase of goods online. The company said last year that the phone service had not lived up to those expectations.[33]
Our marketplaces business unit delivered $1.5 billion in revenue, an increase of 19% over last year, while global GMV increased 12% to $15 billion. This business is off to a good start for the year, highlighted by improving metrics and encouraging trends in the eBay business, as well as excellent performance by StubHub, our online tickets marketplace.[27] Annual profit excluding costs will be $1.70 to $1.75 a share, an increase from EBay's January forecast of $1.63 to $1.67. Revenue may be as much as $9 billion, EBay said, higher than its previous prediction of as much as $8.75 billion. Donahoe, 47, joined EBay in 2005 from Bain & Co. He's said his three priorities for the company are improving its fixed- price business, which competes with Amazon.com, growing PayPal and bolstering customer safety and trust.[34] Skype is still hot, with revenue soaring 61% to $126 million, but it may never justify the lofty price that eBay shelled out for the leading voice chat platform. With 309 million users, Skype has a larger member base than eBay itself -- it's just a lot harder to monetize. It's looking to earn $1.70 to $1.75 a share in adjusted earnings -- just ahead of the $1.68 a share that Wall Street was looking for -- on $8.7 billion to $9.0 billion in revenue.''[35] For the year, eBay expects net revenue in the range of $8.5 billion to $8.75 billion, and earnings of $1.63 to $1.67 a share.[5] Our stability and growth continues to give us the confidence to make innovative changes to our products to keep customers engaged for years to come." EBay also raised its 2008 outlook, projecting sales of $8.7 billion to $9 billion and earnings per share of $1.70 to $1.75, excluding special charges.[36] Sales in stronger foreign currencies translate to more dollars for eBay. EBay raised its outlook for 2008, saying it expects revenue between $8.7 billion and $9 billion with earnings per share between $1.35 and $1.40.[1]
In January, EBay projected so-called adjusted first-quarter earnings of 37 cents to 39 cents a share on sales of as much as $2.05 billion. "They set the bar very low for the new CEO, and they had to set the bar low because of the uncertainty of the new fee changes,'' Tim Boyd, an analyst with American Technology Research, said in a Bloomberg Television interview from Greenwich, Conn. He recommends buying the shares.[37] NEW YORK, Apr. 16, 2008 (Thomson Financial delivered by Newstex) -- EBay (NASDAQ:EBAY) Inc. reported first-quarter adjusted earnings of $562 million, or 42 cents a share, exceeding the mean estimate of analysts surveyed by Thomson Financial of 39 cents a share.[2] EBay is expected to report earnings of 39 cents a share on revenue of $2.08 billion, according to Thomson Financial.[17] Based on generally accepted accounting principles, eBay said earnings will be 30 cents a share to 32 cents a share on revenue between $2.1 billion and $2.15 billion.[15]
In the year-ago quarter, eBay earned $377 million, or 27 cents per share, on revenue of $1.77 billion.[1] Net income rose to $460 million, or 34 cents per share, on revenue of $2.19 billion in the quarter ended March 31.[7]
Net income for the quarter amounted to USD460 million, or USD0.34 per share, a rise of 22 percent on the USD377 million, or USD0.27 per share, recorded for the first quarter of 2007. "This was a very strong financial quarter for the company," said eBay president and CEO John Donahoe, who took over the reins of the company from Meg Whitman on 31 March 2008.[38] Excluding special items, it expects earnings per share to be between $1.70 and $1.75. "This was a very strong financial quarter for the company," eBay Chief Executive John Donahoe Officer said in a company statement.[22] Shares barely budged in after-hours trading. "This was a very strong financial quarter for the company," eBay's chief executive, John Donahoe, said in his first statement since replacing Meg Whitman on March 31.[36]
During the conference call, Chief Executive John Donahoe said buyers appear to be responding to reforms the company introduced in the first quarter that are designed to improve customer service by sellers on eBay.[39] "We saw a slowing in terms of buyers propensity to buy toward the end of the first quarter," Swan said. Donahoe said eBay sellers had responded to pricing changes and boosted its customer service by increasing the volume of new auction listings during the last six weeks of the first quarter. As a results, buyers are trusting eBay more, he said.[20]
SAN FRANCISCO (AP) — More change is in store at eBay, its CEO said after the online auction company reported its profit climbed 22 percent in the first quarter despite anger from its sellers over fee and feedback adjustments.[1]
In the first quarter, the marketplaces division of the company, which consists of eBay, Shopping.com, StubHub, Kijiji and other ecommerce sites, grew 19% and posted $1.48 billion in revenue.[23] The Marketplaces business unit, which consists of eBay, Shopping.com, StubHub, Kijiji and other ecommerce sites, had a strong quarter with a $1.48 billion in revenue, equating to 19% year-over-year growth.[40] Globally, PayPal will continue to focus on greater penetration into the Marketplaces business and the acquisition of new merchants. Skype continued its strong growth trajectory, reporting $126 million in revenue for the quarter, representing 61% year-over-year growth.[40] First quarter operating margin was 25.2 percent, down from 26.5 percent a year ago. The company said the decline was due to faster growth at lower margin businesses such as Skype and PayPal. Those results were helped by currency gains as 55 percent of marketplace revenue comes from abroad.[15] Skype has done particularly well, reporting $126m ('63.5m) in revenue for the first quarter of this year ' a figure representing 61 percent year-on-year growth.[41]
Skype's year-on-year growth was a staggering 61%, with first quarter revenues of $126 million and an increase of 33 million users during the period.[42] The company's payments unit, PayPal, reported $582 million in revenue during the first quarter, an increase of 32% from the year before.[23] The ecommerce company posted first quarter revenue of $2.19 billion, up $424 million from the same period last year.[40] On average, analysts are looking for the company to report revenue of $2.07 billion, up 17% from the $1.77 billion reported for last year's first quarter.[10]
PayPal took in $582 million during the first quarter, representing a 35% growth over the same period last year. It jumped on PayPal quite early, back in 2002 for $1.8 billion.[42] Total payment volume through PayPal was $14.4 billion in the first quarter, up 34% from $10.8 billion last year. 46% of the volume came from payments processed on behalf of non-eBay merchants, up from 38% a year ago.[3]
Including the expense of stock options, eBay said it earned $460 million, an increase of 22 percent from the same period one year ago. Almost 84 million people used eBay across the world in this years first quarter and 647 million products were listed.[20] Many opine that Google buying Skype would integrate well with Google's other phone offerings, VoIP via GTalk, GOOG-411 and GrandCentral. While the acquisition of Skype has widely come to be seen as a blunder for Ebay, the phone service itself has continued to grow fast, adding another 33m registered users in the first three months of this year to reach 309m. Although most use it for free internet phone calls, the addition of extra paid services helped Skype to increase its revenues to $126m in the first three months of this year, up 61 per cent from the year before.[29] Few companies of Skype'''s size can grow revenue and users more than 10% sequentially (quarter-over-quarter), which would make it a very attractive company to Wall Street investor types. Perhaps eBay has hung onto Skype this long just to let it grow into its $4 billion valuation before offering it up on the public markets or selling to someone else? eBay certainly doesn'''t seem to be in any hurry, and Skype seems to just keep growing rapidly in spite of itself. For analysis of the rest of eBay's numbers, check out the coverage from those financial gurus over at SAI.[43]
The San Jose-based company's revenue rose to $2.19 billion, a 24 percent increase over the year-ago quarter's $2.07 billion. "This was a very strong financial quarter for the company," said CEO John Donahoe, who took the reins March 31.[14] Overall, eBay posted first-quarter revenues of $2.19bn ('1.1bn) ' an increase of 24 percent on the same quarter last year. It's great to see Microsoft Vista entering the highly regarded field of corporate musical nonsense.[41] In the same quarter a year ago, eBay earned $377 million (27 cents) on revenue of $1.77 billion.[22] Electronic commerce pioneer eBay reported profits of $460 million on $2.19 billion in revenue, a 24% increase from the prior year.[18] Revenues rose 24 percent to USD 2.192 billion, while the operating profit margin dipped to 25.2 percent from 26.5 percent. Its main business marketplaces increased sales 19 percent year-on-year to USD 1.48 billion, while payments sales grew 32 percent to USD 582 million and Skype posted a 61 percent increase to USD 126 million. Ebay raised its full-year outlook to revenues of USD 8.7-9.0 billion and EPS of USD 1.35-1.40.[44] About 54% of sales on eBay's shopping sites and 43% of revenues from eBay's PayPal payments business came from markets outside the U.S. "There is no doubt that there are uncertain economic times ahead of us that will impact retail and could impact e-commerce," newly appointed eBay Chief Executive John Donahoe said in a telephone interview following a call with analysts.[18] Ebay chief executive John Donahoe has promised to smarten up the online auction site, as it unveils higher than expected results due to higher selling fees and increased revenue from its PayPal payment service.[19] It is the first set of results since long-term CEO Meg Whitman stood down in favour of John Donahoe. He said his first order of business would be to ensure growth by improving the buying experience on eBay. The firm did better from its PayPal payment service and increased selling fees. Its foreign revenue was also boosted by a sliding dollar.[28]
EBay's Chief Executive John Donahoe was quoted in an FT interview as saying: "If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it." The company had intended for the Skype acquisition to bolster its online business through call-billing payment tie-ins between Skype and eBay's PayPal online payments service, but Skype did not live up to expectations. Donahue brushed aside speculation that eBay should also consider selling its PayPal service to prop up its stock value, the FT reported.[32]
"If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it," Chief Executive John Donahoe told the FT. Since it's been almost three years since eBay bought Skype for $2.6 billion, it's hard to imagine much new emerging on the synergistic front.[45] EBay Inc. said Thursday that it would consider selling its Skype telephone division if it could not be integrated with other units. EBay will review Skype this year, and if Chief Executive John Donahoe determines the unit doesn't help the auction and PayPal payment system, it will be reassessed and may be sold, EBay spokesman Jose Mallabo said.[33]
Donahoe, the former president of eBay's marketplaces unit, took over as CEO after Whitman had run the company for 10 years. In February, eBay named Josh Silverman, chief of its Shopping.com property, to head Skype. EBay also halved the fees it charges users to list items on its auction site. It also raised the commission it charges for auction items that sell and hiked fees on other items.[36] Donahoe has already made it clear that he would like to shift eBay's focus from auctions to fixed priced listings, which account for 40% of the company's marketplace revenue. He plans to remain faithful to the auctions since they are still eBay's core business. Last month at a technology conference, Donahoe emphasized eBay's desire to be better attuned to its buyers, noting that the company had previously paid too much attention to the sellers because that's who paid the fees.[5] For the year, eBay expects revenues of USD8.7 billion to USD9 billion; analysts had estimated USD8.79 billion. The online marketplace also re-structured its fees for sellers and introduced a default search order based on relevance and seller quality as part of an overhaul of its business model.[38]
Our stability and growth continues to give us the confidence to make innovative changes to our products to keep customers engaged for years to come." Pleased was eBay with its results it revised its outlook upwards for the coming quarter and the full year. It now expects second quarter revenues in the range of USD2.1 billion to USD2.15 billion; analysts had predicted revenue of USD2.11 billion.[38] With overall take rates staying relatively flat, transaction expense going up marginally, fraud losses coming down, we see pretty good margin expansion on PayPal. The second -- on Skype transaction revenues, yeah, you know, we actually feel pretty good about the Skype growth rates both quarter on quarter and year on year, of transaction revenues. It seemed like the usage increased pretty dramatically but at the same time the revenue decelerated, so I was just wondering if you were doing something on the monetization there. I think a couple of things that we talked about last call, one of the things that we are trying to do in Skype this year is we'''ve got this massively growing user base and we want to -- the key ingredient for them is to engage the user base, so we'''ve looked at a couple of the quarters across the globe to figure out how we can modify the equivalent take rate, if you will.[27] I picked out the things I found most interesting, below, and added a few comments in italics. Note this is not an investment blog, and you should use eBay filings if you want to ensure you get the full story about its financials. The company said revenue growth was driven primarily by Marketplaces net transaction revenues, the ongoing expansion at PayPal, Skype and the company's global classifieds business. ( Interesting they mentioned classifieds prominently.)[16] Revenue for the quarter ending March 31 rose 24% to $2.19 billion, topping analyst forecasts of $2.08 billion, amid strength in Marketplaces net transaction revenue, and expansion at PayPal, Skype and its classifieds business.[2]
Analysts were expecting revenue of $8.78 billion and EPS of $1.68. The company said it repurchased approximately 37 million shares, or about 3% of its outstanding stock, at a cost of approximately $1 billion during the quarter.[23] Excluding special items, it expects earnings per share between $1.70 and $1.75. The company said it repurchased 37 million shares of its stock during the first quarter at a cost of $1 billion.[1] AMR: Whipsawed by high fuel costs and bad weather, American Airlines' parent company lost $328 million, or $1.32 a share, in the first quarter. American, the largest U.S. carrier, said it began the new quarter this month by losing tens of millions more when much of its fleet was grounded for safety inspections. It warned that costs will rise the rest of this year.[7] The online auction giant said Wednesday that net income for the first quarter grew 22% to $460 million, or 34 cents a share, compared with $377 million, or 27 cents a share the year before.[23]
On Wednesday the operation announced $126m in revenue for the first quarter of 2008, representing 61 per cent year over year growth.[46] Skype had revenue of $126 million in the first quarter, up 61 percent.[15] Revenue from Skype, EBay's Internet-telephone unit, climbed 61 percent to $126.3 million in the quarter.[34]
Skype posted total revenue of $126 million in the quarter, an increase of 61% over last year.[27] PayPal posted yet another very strong quarter with total revenue coming in at $582 million, a 32% increase versus the same period last year.[27] The company's PayPal unit generated $563 million in revenue in the fourth quarter, up 35% from the same period last year.[10]
Revenue also hit $126 million, up 61 percent from the same quarter last year.[30]
In total, our combined businesses generated record net revenues of $2.2 billion in the quarter, a 24% increase over last year.[27] "We are glad to be a global business…and the U.S. is on sale right now given the relatively weak dollar." Despite the U.S. slowdown, eBay raised its guidance for the full year. It now expects net revenue of $8.7 billion to $9 billion for the full year, with roughly 25% margins. That's up from the $8.5 to $8.7 billion in revenue eBay had projected in January.[18] The U.S. dollar has fallen to record lows against the euro since the first of the year. Boyd says eBay should have leeway to raise its earlier revenue guidance for this year by $200 million to $250 million based on foreign exchange alone.[36] According to Jeffries analyst Youssef Squali every nickel decline year over year in the U.S. dollar against the pound and euro boosts eBay revenue by $27 million.[17]
PayPal, eBay's online payments service, posted a revenue gain of 32% to $582 million.[36] PayPal, the online-payments service, showed 32 percent year-on-year growth in net revenue, pulling in $582m ('293m) during the quarter.[41] PayPal had $582 million in net revenue, up 32 percent from a year ago.[15] PayPal had a strong quarter with $582 million in net revenue, an increase of 32% year-over-year.[40]
"Big Blue has proven that it can do well at a time of boom as well as doom," Annex Research analyst Bob Djurdjevic wrote in an Apr. 16 research note. Like his counterpart at eBay, IBM Chief Executive also raised full-year projections. "IBM had a very good quarter, and a good start to 2008," he said in a statement. "These results reinforce our confidence in IBM's ability to perform well in a dynamic global economy" and reflect the company's efforts to expand in overseas markets, he said. IBM boosted its forecast for per-share earnings in 2008 to at least $8.50, a 25¢ increase from the target it issued in February.[18] To supplement the company's consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, eBay uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating margin, non-GAAP effective tax rate, and free cash flow. These non-GAAP measures are not in accordance with, or an alternative for, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with eBay's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate eBay's results of operations in conjunction with the corresponding GAAP measures. Reconciliation to the nearest GAAP measure of all non-GAAP measures included in this press release can be found in the tables included on page 13, 15 and 16 of this press release. These non-GAAP measures are provided to enhance investors' overall understanding of the company's current financial performance and the company's prospects for the future. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, and net purchases of property and equipment that may not be indicative of its core operating results and business outlook.[40]
EBay said it now expects annual revenue between $8.7 billion and $9 billion with earnings per share between $1.35 to $1.40.[22] For the full fiscal year, the company forecast revenue in the range of $8.7 billion to $9 billion with earnings, excluding charges, in the range of $1.70 to $1.75 a share.[23] The San Jose, Calif. -based online auctioneer said it new expects second-quarter adjusted earnings of 39 to 41 cents a share and revenue of $2.1 billion to $2.15 billion, compared with analyst estimates for earnings of 40 cents a share and revenue of $2.11 billion.[2] Analysts expected, on average, earnings of 39 cents a share on revenue of $2.07 billion.[14] Analysts predict first-quarter revenue of $2.07 billion and earnings of 39 cents a share.[5] Analysts were expecting earnings before items of 39 cents a share on revenue of $2.08 billion.[23]
For the full year, eBay now expects per-share earnings of $1.70 to $1.75, excluding items, on revenue of $8.7 billion to $9 billion.[21] The revenue target was slightly ahead of estimates. For 2008, eBay raised its earnings target projecting earnings excluding charges of $1.70 to $1.75 a share compared to estimates of $1.68 a share.[15]
During the quarter, we brought back approximately $2 billion from our international subsidiaries to the U.S., which allowed us to repurchase 37 million eBay shares at a cost of approximately $1 billion without the need to access our credit facility.[27] In a volatile market, we opportunistically repurchased $1 billion worth of eBay shares during the quarter, or almost 3% of the outstanding shares.[27]
¶ Delivered Second Consecutive $2-Billion Plus Quarter ¶ Completed Approximately $1 Billion in Stock Repurchases ¶ Acquired Fraud Sciences Ltd. SAN JOSE, Calif. -- eBay Inc. (Nasdaq:EBAY) today reported financial results for its first quarter ended March 31, 2008.[40] Free cash flow during the quarter was $632 million. "This was a very strong financial quarter for the company," said eBay Inc. President and CEO John Donahoe.[40] IBM gained 2.5%, to $123.44, in extended trading. As upbeat as eBay executives were about overall performance, they underscored the challenges facing Donahoe, who replaced Meg Whitman as CEO this month. On his first call at eBay's helm, Donahoe reiterated plans to make eBay's shopping sites more buyer friendly and reaccelerate growth in the company's core business.[18] The credit is determined and issued by GE Money and it'''s based on the buyer'''s credit history. We think there is nice potential there and on top of the PayPal platform, which of course is unmatched with the number of merchants, the number of consumers we have, we think if this is going to take off anywhere it'''s going to take off on PayPal. I think you'''ll see us increasing our focus on this, increasing our marketing around it as the year goes on. With respect to Skype and integration on eBay, as I said earlier we are delighted that we now have Josh Silverman in and running Skype and what we know is Skype is a great standalone business that'''s experiencing explosive growth in terms of its financials and in terms of its user base.[27] Personally, I've never seen the connection between telephone calls/IMing and online auctions, unless you needed to call a seller for some reason. Ebay originally believed that Skype would oil the wheels of its online markets by making communications easier between buyers and sellers, while also supporting new business models such as "click to call". Nearly three years after the acquisition, however, Ebay has yet to prove Skype can help its other businesses.[29] The good news is I won'''t make the decision of which product approach gets used, our users will. As we are testing these different formats, and frankly different formats in different categories, we will roll out the ones that buyers respond best to. By the pre-holiday season, I think you are going to see in different categories different user experiences that bring both the fixed price and the auction listings to bear in a way that buyers can make choices, and again I'''ll end where I started, which is what our buyers tell us repeatedly is they care most about getting a good value on eBay and they care secondarily whether it'''s in an auction or a fixed price format. On the second question in terms of PayPal fraud losses, I would say the team has made great traction in driving down fraud losses quarter over quarter for about six quarters in a row now and they'''ve done it not just by driving down fraud losses but also enabling us to extend and expand our protection programs for both buyers and sellers, so it'''s been great performance. The way they do it is their secret sauce of their fraud detection model that gets more sophisticated the more data they have. The more data and the more transactions, the more insights they have to determine who the good buyers and sellers are and who aren'''t. The team has really made tremendous progress and we believe that with the recent acquisition of our friends at Fraud Sciences over in Israel that their technology and our scaleable platform will enable us to continue to make pretty good progress.[27]
Traffic actually held up in the first quarter. Our traffic, our total aggregate traffic site wide, we had 80 million uniques and the same number of page views, but we are conscious that we are not immune to changes in the economy and the good news for us is that our priorities remain the same in good economic times or bad, which is to say our focus this year is on improving the user experience, improving the buyer experience.[27] Best match is a series of changes, a series of iterations where we are taking advantage of our unique proprietary data on closed transactions and our experience and we'''ll continue to make iterations based on our experience throughout the year. Just to add a little more color on John'''s comments on couponing, what we'''ve concluded is the best way to grow our active user base is by not to lose any of them and coupons is one of the vehicles that we'''ll have to do that. The second thing that you'''ve seen during the course of the quarter is the sales and marketing as a percent of revenue has come down and it'''s because we believe the couponing and the retention of best buyers is a lot more efficient than having to necessarily go out and generate new buyers while not keeping the ones we have extremely satisfied. That'''s a little bit of a shift in terms of how we think about retention relative to acquisition in our sales and marketing dollars.[27]
NEW YORK - Online auctioneer eBay Inc. posted a 22 percent rise in first-quarter on Wednesday, beating analyst expectations, with its revamped website adding buyers for the first time in a year and favorable currency rates. Get stories by e-mail on this topic.[20] EBay handily beat first-quarter views Wednesday, buoyed by favorable currency rates and strong growth in its online sales and payment-processing services. The San Jose, Calif. -based Internet auction leader reported per-share profit of 42 cents, excluding charges such as stock-based compensation, up 27% from the year-ago quarter and nearly 8% above the consensus estimate of analysts polled by Thomson Financial.[36] To compensate, the company raised the percentage it gets from each sale. The changes were designed to make eBay's prices more competitive with services from rivals such as Amazon.com (AMZN), which have been able to eat into eBay's market share and put pressure on the company's growth.[10] EBay's stock may already be banking in a strong report. The shares have jumped more than 22% in the past month after hitting their lowest level in nearly two years. In late January, eBay made several changes in its fee structure, including a sharp cut in many of its so-called insertion fees, paid by sellers to list an item for sale on eBay's main marketplace site.[10] Since ebay fails to enforce their listing policy rule that prohibits listing counterfeits and they profit from allowing these counterfeits to be listed and sold on ebay, perhaps it would be appropriate for a disclosure of just how much money they do receive from these illegal and fraudulent sales. Every day thousands of ebay bidders are ripped off for thousands of dollars and ebay takes their share of these dollars and then brags about how much money they make each quarter or each year, do you know of any other criminal enterprise that does this? Hopefully the judge presiding over the Tiffany lawsuit against ebay for ebay allowing the thousands of illegal tiffany counterfeit sales will actually rule in favor of Tiffany and the buying public and stop this blatant criminal activity.[16]
As Mr. Donahoe should well know, boosting profits in the short term is easy. It also did not take any great act of genius to boost the total number of listings. What's his strategy for the long term? To use the first quarter 08 results as a barometer of how well the company will do in the long term is myopic and down right risky. eBay under its current leadership is heading down a reckless path. As they absolutely refuse to listen to their client base (THE SELLERS) the current management might as well wreck the site as quickly as possible and be done with it.[16] SAN FRANCISCO, April 16 (Reuters) - Internet auction leader eBay Inc (EBAY.O: Quote, Profile, Research ) saw a fall-off in buyer activity on its e-commerce sites at the end of the first quarter, making the company cautious about the threat of a weakening U.S. economy.[39]
Don't bury eBay (Nasdaq: EBAY ). It's not dead yet. The company behind the PayPal financial-transactions platform, its eponymous auction site, and the Skype Web-based voice-chat service came through with a better-than-expected quarter.[35]
Operating margin, excluding charges, decreased to 32% for the first quarter, compared with 33.6% a year earlier. The decrease in operating margins was caused largely by faster growing but lower-margin businesses, such as PayPal and Skype, said eBay.[23] Some argued Skype could have developed the technology itself for less. It's not to say that Skype is worthless or not growing. EBay reported Skype added 33 million subscribers in the first quarter of this year, boosting its total membership to 309 million.[30] There were 83.9 million active eBay users at the end of the first quarter, up 1% from a year before, but up 6% when excluding China and Taiwan locations where eBay last year launched local joint ventures.[3] We generated free cash flow of $632 million in the first quarter, an increase of 32% above last year'''s level, primarily driven by earnings expansion.[27] Non-GAAP EPS was $0.42 in the first quarter, a 26% increase from last year and $0.03 above the high end of our guidance range.[27]
In the first quarter, the Armonk, N.Y., company earned $2.32 billion, or $1.65 per share, ahead of its profit of $1.84 billion, or $1.21 per share, in the 2007 period.[7] Analysts polled by Thomson Financial had called for a 2008 profit of $1.68 per share. The company said it completed its $1 billion stock buyback program.[8]
Revenue came in at a record $2.19 billion, representing 24% Y/Y growth (only $50 million short of my estimate and a whopping $120 million more than Wall Street expectations). EPS growth was even higher at 26% Y/Y and FCF growth was higher still at 32% Y/Y. Combined with a large $1 billion buyback at a very attractive price (average of $27.24 per share), this is a fantastic start to 2008.[47] "Skype continued its strong growth trajectory, reporting $126 million in revenue for the quarter, representing 61% year-over-year growth.[43]
We delivered nearly $2.2 billion in net revenue, representing 24% year over year growth.[27]
Online auctioneer eBay ( NSDQ: EBAY ) reported Q1 revenue of $2.19 billion, a 24 percent increase from $1.77 billion in the year-ago period.[48] EBay's marketplaces business, which includes auctions, Shopping.com and its StubHub ticket-selling business, saw revenue surge 19% to $1.48 billion.[36] Overall, our marketplaces business segment achieved net revenues of $1.5 billion, an increase of 19% over the year-ago period.[27]
The company expects net revenue in the range of $2 billion to $2.05 billion, and earnings in the range of 37 cents to 39 cents.[5] The company's January forecast, which some saw as overly conservative, was for earnings of $1.63 to $1.67 on revenue of $8.5 billion to $8.75 billion.[21] Analysts' latest forecast was for earnings of $1.68 and revenue of $8.79 billion.[21]
Analysts were expecting EPS of 40 cents on revenue of $2.11 billion for the quarter.[23] Analysts were willing to settle for a non-GAAP profit of $0.39 a share on just $2.1 billion in revenue.[35] Citigroup posted its second straight quarterly loss, hurt by more than $15 billion in write-downs and increased reserves for credit losses. The loss and the company's revenue were both worse than expected, yet Citi shares rose strongly in premarket trading on hopes that the worst of the subprime crisis was past.[45]
Shares of San Jose-based EBay fell $1.11, or 3.5%, to $31.01 after the company reported slowing auction growth Wednesday.[33] "What is negative is the fact that GMV growth did not accelerate, so people wanted to see that 12 percent growth go to 14 or 15 percent growth, and it didn't get there even with a lot of currency help." Shares of eBay rose 10 cents in after-hours trading, up 1.2 percent from their closing point, $32.12, up 54 cents, or 1.7 percent, for the day.[22]
River Valley Bancorp: The Madison, Ind., company said net income for the quarter ended March 31 rose 15.5 percent to $615,309, or 38 cents a share.[7] Net income climbed 22 percent to $459.7 million, or 34 cents a share, the online retailer said Wednesday in a statement.[37] Excluding charges, the company reported net income of $562 million or 42 cents a share.[23]
Net income grew 22 percent to $562 million ($.42 per share) from $460 million ($.33 per share).[48]
Net income on a GAAP basis was $460 million, up 22 percent from the same quarter last year.[16]
Total registered users grew to an impressive 309 million, representing an increase of 58%. The growth rate of our key user metrics accelerated this quarter as Skype-to-Skype minutes were up 30% to 14.2 billion and Skype-out minutes increased 33% versus last year to 1.7 billion.[27] Growth in active users, however, remained flat at 1 percent over the same quarter a year ago, and the growth rate has steadily declined, down from 10 percent last year.[22]
The growth rate for the total value of goods for sale on eBay, or GMV, was down slightly at 12 percent, versus 14 percent a year ago.[1] "With Q1 behind us, I feel very good about the direction we are headed." The company's presentation cautioned that its 24 percent growth in first-quarter revenue came in the face of a softening economy. EBay said it was increasing its outlook even while feeling cautious about the economic climate. "Softening economies have modestly slowed domestic demand in the U.S. and U.K.," eBay stated in a presentation released on its investor site ahead of the conference call.[49] International revenue rose 32 percent, helped by the dollar's decline and Europeans buying goods from the U.S. EBay raised fees for completed sales and lowered the price of listing items to attract a better selection of merchandise.[37] International revenue climbed at twice the pace in the U.S. Overseas sales make up 53 percent of EBay's revenue and cross-border buying made up 18 percent of merchandise volume.[34]
Online marketplace eBay saw sales jump 24 percent for the first quarter of 2008, while the firm raised its outlook for the coming quarter.[38] Online auctioneer eBay has turned in a better first quarter profit than expected, shaking off fears that recent changes at the group would bite into growth.[28]
GMV growth in the U.S increased 7% to $7.2 billion in the quarter, said eBay.[23] I told you in January that PayPal is a gem of a business and that we'''d continue to focus on PayPal's growth. As evidenced by the numbers from this quarter, PayPal remains a fantastic trajectory. PayPal's Q1 global TPV of $14.4 billion accounted for nearly 9% of worldwide e-commerce, with more than a third of that coming from countries outside the U.S. This is an all-time high for international TPV.[27] What we get out of PayPal and the merchant services business in particular is a broader look into how e-commerce is growing overall. It just gives us a much broader lens because as John indicated, we'''re a significant player on the top online retailers and as we watch merchant services growth, we -- it'''s a tale of two cities. One is we are still in relatively hyper growth mode of 61% global growth of TPV, stronger outside the U.S. than here in the U.S. But we do see a gradual deceleration partly because we are dealing with large numbers. In deciphering between what is share of checkout gain versus new account gain versus overall relative economy is an art, not a science at this stage.[27] In the payments business, obviously we are more exposed to global economic conditions but PayPal's rapid global growth and increased ubiquity and share of checkout is driving a lot of growth there, so it'''s hard to separate the impact on the economy when you have a merchant services business growing at 60%. We are keeping a close eye on it but we are, as I said earlier our priorities for 2008 remain the same under both economic -- under all economic conditions.[27]
Operating margin came in as expected at 32% in the quarter, 160 basis points lower than last year, primarily due to a business mix shift towards our higher growth but lower margin PayPal and Skype businesses, and higher litigation expenses. [27]
"The results reflect the strength provided by our diverse portfolio of businesses." More than half of eBay's business - including its core online auction, fixed-price and store listings, PayPal, Skype and classifieds - takes place overseas. Sales in those stronger foreign currencies translate to more dollars for eBay.[22] Sales at Skype, eBay's Internet phone business, soared 61% to $126 million.[36]
In January, it forecast EPS of $1.63 to $1.67 on sales of $8.5 billion to $8.7 billion. "The effect on eBay of a slowing economy at this point 19eems to be very minimal -- if there's one at all," said analyst Tim Boyd of American Technology Research.[36] Twenty-two analysts surveyed by Bloomberg estimated average earnings of 39 cents a share. They predicted sales of $2.07 billion.[37] IBM said net income rose 26%, to $2.32 billion, or $1.65 a share, beating analysts' expectations for per-share earnings of about $1.45.[18]
Updated from April 16. SAN FRANCISCO -- eBay EBAY shares held their ground after the company's tepid first-quarter user growth offset a boost in profit that beat analysts' expectations.[23] Active user growth on the eBay platform, at 1% Y/Y (or 6% Y/Y excluding China/Taiwan), finally seems to be bottoming out. If a flat user base is generating 14% Y/Y growth in Marketplaces transaction revenues in Q1, you can imagine the opportunity if EBAY revive even a tiny portion of the massive pool of dormant users over the remainder of the year (EBAY mentioned early testing of " couponing" showing positive signs in this regard).[47] "If the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it." This decision is interesting, to say the least; after many, many problems, Skype's revenue has shot up, and its user base is huge. John Oates observed that eBay appears to be " mplementing buy high, sell low strategy." It's difficult to guess whether Donahoe is following some long-decided plan of action, or is just trying to make an impact as a new leader. Either way, all business considerations aside, he loses points for using the "Office Space"-style word "synergies."[31] As Donahoe stated, "eBay still has much work to do." That work has included raising fees, turning off sellers from selling, changing search criteria and revamping the feedback system. This not work as much as it is a total re-organization of eBay itself. A few earnings quarters from now will tell the story as to how these changes have affected revenues.[16] SAN FRANCISCO -- Oh what a difference a quarter makes. Since its last earnings report, online auction king eBay EBAY has replaced its CEO, changed its fee structure and policies, and weathered a seller boycott. Now we're about to see what impact those changes will have on its first-quarter earnings, which will be reported after the close of trading on Wednesday.[5]
"The results reflect the strength provided by our diverse portfolio of businesses." The earnings come as eBay makes significant changes to its marketplace business in an attempt to improve the experience for buyers and fend off rival Amazon.com, which has been attracting the third-party sellers who traditionally sell their wares on eBay.[13] Safer payments is a policy change that requires sellers in Australia to offer PayPal as the only payment option. We see this as an additional safety net for buyers and an ideal way to give buyers a higher degree of protection and trust when transacting on eBay. We believe this will eventually lead to increased transaction volume. We are so confident that this will promote a safer eBay experience for buyers, we are simultaneously increasing PayPal buyer protection to $20,000 Australian dollars. Now, for those of you that don'''t have your calculators on hand, that'''s about $18,500.[27] Donahoe did not provide further details on changes in the works, but pointed to a test in Australia where PayPal, eBay's online payment service, is the only payment option on eBay. 'We see this as an additional safety net for buyers and an ideal way to give buyers a higher degree of protection and trust when transacting on eBay,' Donahoe said.[3]
I said that 2008 would be a year of bold changes where we would make breaks from the past by delivering against three clear corporate priorities. One, make eBay easier and safer to use; two, improve value and selection through pricing and incentives and by weaving auctions and fixed price in a uniquely eBay way; and three, extend PayPal's leadership position in online payments both on and off eBay. During the call today, I will walk through progress we'''ve made against these three priorities.[27]
The report will be the first for eBay ( EBAY ) since the company rolled out the changes earlier this year. It also will be the first for new CEO John Donahoe, who took over after long-time chief Meg Whitman announced her retirement in January.[10] EBay on Wednesday reports its first quarter results and there are many loose ends to tie up. Those are some big questions and eBay's new CEO John Donahoe, who officially took over March 31, isn't going to have all the answers.[17] Good day, everyone, and welcome to eBay's first quarter 2008 earnings results conference call. This call is being recorded.[27] EBay's reported solid first quarter results and upped its earnings outlook for 2008.[15]
Thank you for joining us and welcome to eBay's earnings release conference call for the first quarter of 2008.[27]
Traders may have been apprehensive about eBay's adjusted-operating margin, which fell from 33.6% a year ago to 32% in the first quarter.[8] Marketing services increased to 15% of marketplaces revenue in the first quarter, up from 11% last year.[27] The percentage of Fixed Price trading as a percentage of GMV remained flat at 42%. Beginning with the first quarter of 2008, we reclassified revenue generated primarily from our Marketplaces non-gross merchandise volume based businesses (which includes Shopping.com, Rent.com and our classified websites) from "Net Transaction Revenues" to "Marketing Services and Other Revenues" in order to more closely align our net transaction revenue presentation with our key operating metrics. "Marketing Service and Other Revenues" also includes amounts previously reflected under "Advertising and Other Revenue."[16]
Marketplaces, which consists of eBay.com, Shopping.com and the firm's other e-commerce sites, posted revenue of USD1.48 billion for the quarter, up 19 percent on the prior year.[38] Revenue for the quarter ended 31 March 2008 came in at USD2.19 billion, up USD424 million on the same period last year.[38] PayPal delivered revenues of $582 million, up 32% from the same period last year.[27]
Donahoe told the Financial Times that "Skype is a great standalone business". It is expected to make a profit this year on revenues of $500m.[12]
An outlook given further weight after the auction house wrote down the value of the purchase by $1bn last year. Throughout its lifecycle in the eBay portfolio, Skype has been referred to as a "great standalone business" and it is this'standalone' reference that has irked eBay so much.[46] Online auction house eBay is considering selling off internet telephony operation Skype, if it fails to find a better stratagem for integration of the businesses by year end.[46]
EBay dropped $1.15, or 3.6 percent, to $30.97 in early Nasdaq Stock Market composite trading. The online retailer fell 3.2 percent this year before today, compared with a 19 percent decline by Amazon.com, the world's largest online retailer.[37] For the full year eBay now sees adjusted-earnings of $1.70 per share to $1.75.[8] The company offers the new service as part of the One XL PND and as an add-on for existing customers. This service will provide a nice boost in revenues for the mobile operators that partner with TomTom as the agreement between TomTom and the operator includes a revenue share of the monthly recurring subscription cost for the HD traffic service. In this Research Brief we have estimated revenues for Vodafone Netherlands and for mobile operators in Belgium, Germany and UK. Telecompaper estimates that Vodafone Netherlands will add about EUR 7.3 million in extra data revenue in 2009, and the mobile operator in Belgium that secures the deal with TomTom could earn EUR 2.4 million in one year.[44] The company repurchased about 37 million shares of common stock at a cost of about $1 billion.[36] Excluding items, the company's income would have been $561.5 million, or 42 cents a share.[14]
EBay bought Israeli software company Fraud Sciences Ltd. in January for $169 million to improve PayPal security. In March, EBay said it would fire 125 of its 15,500 employees as part of a global reorganization.[34] Donahoe replaced Meg Whitman as CEO two and a half weeks ago. Perhaps this is something they should have thought of before buying the company for a reported $3.1B in 2005. eBay wrote off Skype with an impairment charge on the company in Q3 2007.[29] John Donahoe, who assumed the role of chief executive officer of eBay at the end of March, said that the company is focusing on the synergies between Skype and its main business. If those synergies aren't regarded as strong enough, Skype's position in the eBay portfolio would be reassessed.[46] "This was a very strong financial quarter for the company," said eBay president and chief executive John Donahoe on Wednesday.[41] SAN FRANCISCO (Reuters) - Internet auction leader eBay Inc (EBAY.O: Quote, Profile, Research ) said on Wednesday that 2008 was off to a strong start and the company was increasing its financial outlook despite signs of a weakening in two of its top three markets. "We are encouraged by what we are seeing," eBay Chief Executive John Donahoe told investors on a conference call following its first-quarter report.[49]
President and CEO John Donahoe said the company saw early progress with the company's Best Match search initiative in the U.S., UK, Germany and France. He said there is early evidence that that DSRs are working, as the average DSRs show signs of improvement, and average shipping cost is 2 percent lower. Buyers are telling eBay they are seeing better communication from sellers, as well.[50] From May, Ebay will not allow sellers to leave negative feedback for buyers. Donahoe has not dismissed the possibility of selling Skype, but says he wants to give its chief executive Josh Silverman more time to look at the synergies between the calling service and eBay.[19] We said that for the first time in our history we were going to start rewarding sellers who provide the best buyer experience. You'''ll recall that last year during 2007 we implemented detailed seller ratings, or DSRs, which allow buyers to rate sellers on the qualities of service most important to them. During Q1, we began using DSRs to extend seller discounts for qualified power sellers based on the quality of their service and we began to increase exposure for listings and search results for those sellers who have consistently high DSRs -- in other words, sellers who provide the best customer experience.[27] We'''ll expand that in Q2 and again, based on that learning we will continue to expand it during the year but it'''s going to be very targeted and very focused on the key points in a customer'''s lifecycle where we think it can have the biggest impact. With respect to best match, the biggest impact in best match I think in the first quarter has been we are -- buyers are seeing more items from sellers that provide good buyer experiences, so the biggest impact has been high DSR sellers are getting more exposure on the first page and lower DSR sellers are getting less, and so buyers aren'''t conscious that they are seeing a higher quality inventory necessarily on the surface but we are seeing that in those categories, in those situations where we'''re ramping that up, we'''re seeing higher conversion rates.[27] Our sellers have made good progress on DSRs. That will drive higher discounts which we'''ll feel great about paying as they improve the buyer experience. Lastly, we will step up the level of couponing to engage and retain our active user base over the course of the year, and the combination of those three things will have -- result in a modestly lower take rate and modestly higher contra revenue for the rest of the year.[27]
There may be some changes that will have some negative short-term impacts as we -- you know, Bob mentioned Australian safe payments, that as we go to all electronic payments and there'''s cash and checks and things that come off the site, we may have some sellers that make some noise and/or pull some things, but we are absolutely confident in the direction we are going that we are going to improve the buyer and overall user experience on eBay and that that is going to lead to a healthier, more vibrant marketplace.[27] Just when it seemed to be flagging, eBay has surprised everyone by recording a 22% jump in profits. Both numbers were higher than analysts were predicting, leading Donahoe to claim that eBay had finally 'turned the corner' (that phrase beloved of new CEOs) as a result of its recent website revamp and pricing changes. Donahoe only took over from ex-boss Meg Whitman at the end of March, so he can't technically claim any credit for it. It's still a much more upbeat start to his tenure than anyone was really expecting. He's instigated some big changes to its site in recent months in an attempt to improve the user experience and tighten up security (Australian users now have to use PayPal, for instance) - and although he admits that there's a long way to go, so far the changes seem to be working.[4] Mr Donahoe has directed changes to the site since taking over from Meg Whitman, including changes in the fees charged to sellers that provoked a boycott from some. The company has also changed the way auction listings are presented in the sites' search results and announced coming changes in its renowned feedback system, where users rate each others' performance.[13] The changes include lower listing fees and higher fees on sales, a move designed to encourage eBay sellers to offer greater selection, and more prominence in search results and lower fees for sellers highly rated by eBay buyers.[3] Besides making changes in fees and in the feedback it gathers about buyers and sellers, eBay added a 20-day hold on payments for certain items through PayPal, which drew an outcry from sellers.[1]
EBay Inc., the world's largest Internet auctioneer, posted first-quarter profit that rose more than analysts estimated on higher selling fees and increased revenue from its PayPal payment service.[37] Aaron Kessler, an analyst for Piper Jaffray, still sees a lot of promise in eBay. "While we are somewhat disappointed with the lower-than-expected revenue guidance for 2008, which implies 11-14% revenue growth, we believe eBay is likely being conservative given the uncertainty of the economic environment and the fee changes," he wrote in his research.[5] The net revenue and net TPV growth was driven primarily by the continued strong growth of Merchant Services globally and increased penetration on eBay internationally.[40]
Today eBay represents a portfolio of businesses, some of which monetize the services we provide to our users in new and different ways. Therefore, in order to help investors better understand our portfolio, we are introducing a new framework for revenue classification. We believe this new classification will increase transparency and provide better alignment with some of the non-GAAP metrics we report.[27] While auction revenue was $1.48 billion, the number of new users rose just 1 percent as the number of items which sold fell.[24] Revenue rose 11 percent to $24.5 billion, better than the $23.7 billion expected by analysts surveyed by Thomson Financial.[7] Sales increased 11%, to $24.5 billion, also exceeding the analyst forecast of $23.6 billion in revenue.[18]
The Internet auction company said it expects 2008 revenue between $8.7 billion to $9 billion.[24] For the full year 2008, we now expect revenue to be in the range of $8.7 billion to $9 billion, and non-GAAP EPS in the range of $1.70 to $1.75, up from previous guidance of $1.63 to $1.67.[27]
U.S. GMV was $7.2 billion in the quarter, an increase of 7% year over year, driven by strength in media and apparel.[27] Total payment volume in the quarter was $14.4 billion, an increase of 34% year over year.[27] Net total payment volume (TPV) for the quarter was $14.42 billion, an increase of 34% year-over-year.[40]
Citigroup Inc reported on Friday that it sustained a net loss for the 2008 first quarter of $5.1 billion and that it took $6.0 billion in pre-tax write-downs as a consequence of sub-prime mortgage losses.[45] We ended the first quarter with more than $4 billion in cash, cash equivalents and investments, a decrease of approximately $900 million from December 31.[27] Gross merchandise volume was $16.04 billion for the quarter, an increase of 12% over the first quarter of 2007.[40]
The increase in our guidance reflects our strong Q1 performance, coupled with benefits from a weaker dollar and a lower share count due to our repurchase activity in the first quarter. Adjusted for these factors, the guidance for the rest of the year is similar to the view we laid out for you three months ago. This guidance reflects the possible impact of the changes that are necessary to strengthen our competitive position.[27] The company's growth has slowed amid mounting competition from e-commerce sites like Amazon.com. It benefited in the first quarter from the weak dollar and beat Wall Street's expectations. It also raised its outlook for the rest of the year.[1] The changes marked the first big moves by Donahoe - - who became CEO on March 31 -- to reverse years of slowing growth at the electronic-commerce company's main business.[21] Our stability and growth continues to give us the confidence to make innovative changes to our products to keep customers engaged for years to come." Donahoe only took the helm at eBay on 31 March, so the first-quarter results can be attributed to his predecessor, Meg Whitman.[41] Not having play the fundamental sort role but to allow the lowest price, highest quality seller fixed price items to be higher up in search results. So I think the evidence is in the recent weeks, we'''ve had an increase in listings, sold items have gone up, conversion rate has declined slightly but we feel like it'''s held up pretty well and we feel optimistic that the changes we will continue to make during the year will result in both improving conversion but more importantly improving growth in GMV.[27]
Cross-border trade helped increase GMV growth, accounting for 18% of global GMV in the quarter compared to 16% last year. That being said, GMV growth was negatively impacted by the broader economic environment in two of our largest markets, the U.S. and the U.K., which resulted in weaker domestic demand on these sites.[27] The number of listings on the site grew 10 percent over the year-ago quarter, continuing growth seen in the fourth quarter, which came after two quarters of declining listings last year.[22] Even though the site built on last year's final quarter, with year-over-year listings growing (unlike the year-over-year dips during last year's second and third quarters), the actual growth in gross merchandise value that swapped hands on the site rose a mere 12%.[35]
During the quarter, the company made several modifications intended to increase listings, improve buyers' experiences and make the site safer from fraud. The company changed its fee structure and feedback system, a move that some worried could dampen listings growth.[22] The company in the first quarter made several modifications aimed at boosting listings, improving buyers' experiences and freeing the site of fraud.[1]
First I want to summarize our overall financial results from the quarter. Looking at the company'''s performance, this was a strong financial quarter for eBay. [27] People are leaning on PayPal even more with every passing quarter. This is the first time I've ever discussed PayPal's results before eBay, and I'd better get used to it.[35]
The number of active eBay users, which analysts follow closely, increased only 1 per cent from the past quarter, to 83.9 million. Another important number to eBay watchers is gross merchandising volume or GMV, the total sum of all transactions on the eBay marketplace. [13] Gross merchandise volume (GMV), which indicates the total value of all successfully closed listings between users on eBay, was up 12% to $16 billion globally.[23] Gross merchandise volume -- the value of all goods and services sold on eBay -- jumped 12% to $16.04 billion.[36]
Merchant services recorded $6.6 billion in global TPV in the quarter, representing a 61% year-over-year growth and accounting for 46% of the total TPV.[27] In the crucial fourth quarter, GMV grew only 12% compared with 20% for the same period the previous year. Other units of eBay have been larger growth drivers over the past year.[10] We believe the strong growth trajectory we'''ve seen at PayPal over the past quarters is a reflection of the continued progress in our efforts to achieve ubiquity for PayPal on the web, through increased penetration on eBay and an expanded footprint beyond eBay.[27] "The results reflect the strength provided by our diverse portfolio of businesses." EBay's gross margin fell to 76% from 77.7% on growth of its lower-margin businesses like PayPal and Skype.[21] Growth was primarily driven by eBay's Marketplaces division, as well as expansion at PayPal and Skype, the firm said.[38]
Skype announced a product called Skype Prime, which is in essence a services marketplace on Skype. We'''ll begin to cross-promote this a little bit on eBay but Skype is just now getting to some of its e-commerce priorities and we'''ll explore those synergies as we go longer in the year.[27] s portfolio of businesses." While Skype might not be a good fit for eBay, those are impressive numbers by any measuring stick, and if eBay were to spin of Skype as its own public company, I think it would both appease eBay'''s shareholders, put a bunch of cash in the bank for more sensible acquisitions, and also be one of the hotter Internet IPOs in years.[43] Squali says that core U.S. listing for eBay gained six of the seven weeks since Feb. 20, indicating that the company finished the quarter in relatively good shape.[17] "We believe eBay will continue to outperform despite concerns over the economic backdrop," Credit Suisse analyst Heath Terry wrote in a note to clients Tuesday, noting that the fee changes likely only benefited the company for one month of the quarter.[10] Analysts say eBay's performance in the quarter benefited strongly from a weak dollar and the fact that 53% of the company's business comes from abroad, mainly from Europe.[36]
Most analysts expect an inline quarter with a little help from a weak dollar53 percent of eBay's revenue comes from abroad.[17] PaylPal also had a strong quarter, recording revenue of USD582 million, up 32 percent on Q1 2007, while Skype saw revenue jump 61 percent year-on-year to USD126 million.[38] Skype revenue surged 61% as the Internet-telephony business added 33 million registered users during the quarter.[21]
The VoIP player added 33 million registered users in the quarter, ending the period with more than 309 million registered users around the world. Skype is even expected to turn a profit sometime this year.[46]
Now let'''s walk through some of the key operating metrics. eBay's market prices had 84 million active users on a trailing 12-month basis, an increase of 1% over last year or up 6% excluding China and Taiwan.[27] New listings rose 10 percent to 647.4 million from a year earlier, the second quarterly increase in a row, EBay said.[34] New listings totaled $647 million in the quarter, an increase of 10% year-on-year.[27]
PayPal had $582 million in net revenue, an increase of 32% year-over-year.[16] PayPal revenue climbed 32 percent to $581.6 million as the payment unit signed agreements with JetBlue Airlines and Italy's Ferrari Store.[34]
Revenue climbed 24 percent to $2.19 billion for the three months ended March 31.[37] Citi offers up a helpful cheat sheet as well to navigate through earnings across the key metrics: Anything less than $2.1 billion in revenue is a negative, in line is neutral, above $2.1 billion is a positive.[6] Analysts say that eBay will project earnings and revenue in line with consensus estimates for 2008.[17] EBay projected second-quarter earnings of 39 to 41 cents a share, excluding some costs, in line with analysts' estimates of 40 cents.[34] As for the outlook, which is what most folks were waiting for, eBay ( statement, preview ) said it expects second quarter earnings of 39 cents a share to 41 cents a share excluding charges.[15] Excluding charges, eBay had earnings of 42 cents a share, which topped Wall Street estimates by three cents.[15]
New CEO John Donohoe has changed rates it charges sellers. EBay pointed to its online ticket service StarHub and advertising as the fuel behind the higher earnings.[24]
Such guidance is based on information available on the date of this earnings release, and eBay assumes no obligation to update it. Some of the factors that could affect the company's operating results are set forth under the caption "Forward-Looking Statements" above in this press release. More information about factors that could affect eBay's operating results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in its most recent annual report on Form 10-K and any subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting the company's investor relations web site at http://investor.ebay.com or the SEC's web site at www.sec.gov.[40] Because eBay has historically reported certain non-GAAP results to investors, the company believes the inclusion of non-GAAP measures provides consistency in the company's financial reporting. For its internal budgeting process, and as discussed further below, eBay's management uses financial statements that do not include stock-based compensation expense, employer payroll taxes on stock-based compensation, amortization or impairment of acquired intangible assets and the income taxes associated with the foregoing.[40]
Coupon offers will expand during the second quarter and throughout 2008, Donahoe said. Earlier, eBay officials said 2008 was off to a strong start and the company was increasing its financial outlook despite signs of a weakening in the United States and Britain, its No. 1 and No. 3 markets.[39] Donahoe said the coupon program had a very surprising ROI (return on investment). He said there was a very good redemption rate, and eBay would expand the coupon program in the second quarter. He called the program "targeted and focused," providing coupons to top buyers in the part of the life cycle with the biggest impact.[50] Donahoe talked about the testing eBay is doing on "split-screen" in which eBay presents fixed-price and auction listings side-by-side on the search results page ( http://www.auctionbytes.com/cab/abn/y08/m02/i29/s01 ). He said there will be different formats of the split screen in different categories, and by the "pre-holiday season," the new split-screens would roll out. He said buyers have told eBay that getting good value is more important than the listing format.[50] Donahoe has highlighted broad goals in enhancing the eBay experience, boosting listings growth and melding the auction and fixed price models.[17] Germany is No. 2 and Britain is the No. 3 eBay market. Donahoe said eBay's long-term plan to revive growth in its core auctions business is showing early signs of progress.[49]
GMV dropped 1 per cent from the past quarter, a sign that eBay's core auction business continues to stagnate.[13] A slowdown in GMV over the past several quarters has given rise to concerns that eBay's core auctions business has reached a plateau.[10]
Online auction company eBay beat analysts' expectations, reporting a 22 percent increase in first-quarter profit. [7] Quarterly profits at IBM leaped 26 percent and blew past analysts' forecasts yesterday, with U.S. operations showing surprising strength given the faltering economy. The technology company also increased its earnings forecast for the year.[7]
Ebay reported first-quarter net profit of USD 562 million, up 22 percent from a year earlier.[44] EBay's global classifieds business reported a 101% increase in visitors from a year earlier, with an average of 70 million each month.[36] In key operating metrics, PayPal had 60 million active accounts at the end of the quarter, an increase of 17% over last year.[27] Non-GAAP operating margin decreased to 32.0% for the quarter, compared to 33.6% for the same period last year. The decrease in operating margins was caused primarily by our faster growing lower-margin businesses, such as PayPal and Skype.[40]
On Skype, when you pull out a bump a little bit from other revenue, it looks like transaction revenue in Skype decelerated pretty significantly to about 55% year over year versus 79% in the fourth quarter.[27]
Within marketing services, our classifieds business continued to experience robust growth at 60% year over year, and our graphical and text advertising revenues increased more than 150% as we expanded coverage and improved targeting.[27] In Q1, TPV from PayPal's European merchant services business delivered 69% year over year growth.[27]
PayPal continues to be a pillar of growth for EBAY. The growth of PayPal Merchant Services, at 61% Y/Y, continues at full pace and now represents 46% of PayPal TPV.[47]
"The results reflect the strength provided by our diverse portfolio of businesses." The company's gross margin dropped from 77.7 percent to 76 percent, reflecting growth of its lower-margin businesses such as PayPal and Skype.[14] Secondly, you have strong growth of registered users and Skype to Skype minutes, but one of the things that you talked about when you acquired Skype was integrating Skype on the eBay platform. Can you give us some update what kind of traction you are seeing integrating Skype on the eBay platform? Are you satisfied with that? If not, what can you do about that? Thank you.[27] Again, since cable television systems must be able to decode the signal fast enough, Cisco must have people skilled in high-performance codec development. Any of these companies would seem to be better partners than eBay. None of them will likely buy it, but I could see Skype faring better with any of them. They have skills and experience eBay would not have had that relate to what Skype is doing. This does raise an interesting question, though. If ISPs are highly concerned about the bandwidth requirements to deliver the BBC's iPlayer content (given that that can be delivered best-effort, whereas Skype's cannot) to the point where they think the BBC should pay extra for that bandwidth, and given that ISPs are keen to ditch neutralty and charge providers extra just to get best-effort, it follows Skype will be in for some hefty ISP bills in the future. Assuming bandwith charges are equal to QoS charges, that means they pay twice what any other Internet service pays for the same effective level of service. That means they'd need twice as many users as a profitable e-commerce business, assuming service is a major cost.[11]
EBay CEO John Donahoe told the Financial Times that he would reassess the future of Skype if they could not find "strong synergies".[25] Last month, Josh Silverman, then CEO of Shopping.com, another eBay company, took the reins at Skype, reporting directly to John Donahoe, president and CEO-elect of eBay.[46]
Donahoe dismissed reports that eBay wanted to sell the internet payment system PayPal, which Donahoe said brings huge advantages to eBay and which the company wants to hold on to "for many years," Donahoe said.[26] Users can expect more rejigging of the fee structure, more refinements to eBay's search functions and more payment guarantee initiatives at PayPal.[1]
We'll at least get some color on eBay's prospects in future quarters. It's been a long two months since eBay cut listing fees, boosted selling standards and dangled carrots in front of sellers to move more volume.[17] RE: eBay: Did listings change make a difference? While it is true that eBay did reduce listing fees, on the other hand they raised final value fees (fees the seller pays on the final price of the item.)[17]
For buyers, it'''s a critical element of trust and creates the mindset needed for a successful transaction. Over the years, our feedback system had lost some of its balance and fairness, so in January we set out to fix this by announcing a series of changes. Now as we expected, some of the announcements generated a lot of passion from our community and this is a good thing. eBay was built on strong customer input. That input makes us stronger because we listen. For instance, we heard a lot of feedback from our media sellers that the pricing structure we announced didn'''t make economic sense for their businesses. After hearing their thoughts and taking into consideration a number of factors, we made the decision to move to category specific pricing for our media sellers.[27] It's going to take a good year to see if there is any impact on ebay as a result of all of these changes.[16]
RBC analyst Stephen Ju notes that eBay's average selling price per item is likely to have fallen due to the listing fee changes that favor cheaper goods.[17] Analysts will also be paying attention to the company's gross merchandise volume -- the total dollar value of goods sold over eBay's site -- which is a closely watched metric.[10] Scott Kessler, an equity analyst at Standard Poor's, agrees. "People are starting to recognize that (eBay) is a good, diversified global company that has a good valuation," he said.[36]
Fueling the growth was growing demand for U.S. goods abroad and strong activity on eBay's international sites.[18] Longtime Fool contributor Rick Munarriz is a satisfied eBay user, with 173 positive feedbacks to show for it. He does not own shares in any of the companies in this story. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance.[35] Shares of eBay were up 7 cents to $32.19 in recent after-hours trading.[23] Shares of San Jose (Calif.) eBay rose 0.4%, to $32.12, in extended trading on Apr. 16.[18]
Ebay began acknowledging as much in October when it wrote down $1.4 billion from the value of the business. [30] For the second quarter, eBay forecast sales of USD 2.10-2.15 billion and EPS of USD 0.30-0.32.[44] Sales rose 24% from the year-earlier quarter to $2.19 billion, beating views by nearly 5%.[36]
Royal Bank of Scotland is set to announce a rights issue to raise as much as $20 billion next week, an industry source told Reuters, in a radical u-turn for Britain's second-largest bank and the first major capital hike for a British lender since the start of the credit crunch. It could also mark the end of an era for the bank's well-respected chief executive, Fred Goodwin, whom analysts and shareholders say would face an uphill struggle to push through a hefty capital increase and remain in the job.[45] 'We still have a lot more work to do,' Donahoe told financial analysts yesterday in a conference call to discuss first quarter results.[3] "We saw a slowing in terms of buyers' propensity to buy toward the end of the first quarter," Chief Financial Officer Bob Swan told Wall Street analysts on a conference call following the quarterly financial report.[39]
I would say it'''s one of the data, one of the variables, one of the inputs where it gives us a broader lens into an overall e-commerce landscape that the experts have suggested has gone from a 19% growth rate in the fourth quarter down to about a 13% to 14% market rate of growth here in the first quarter. That'''s a data point that we use in looking forward.[27] Active User Growth, which has spiraled downward for the past several quarters, under 5 percent, bad; 5 - 7 percent, neutral; over 7 percent, good.[6] With a new president, our plan for Skype is to focus on providing the best possible user experience and continuing the incredible growth momentum we've enjoyed with Skype for the past four years.[11] Skype continues to experience tremendous growth. In February of this year, Skype announced that it had enabled a total of 100 billion minutes of conversation. That is a remarkable milestone.[27]
With new leadership in place, 2008 looks to be another impressive year of innovation and growth at Skype.[27]
Equally important, non-transaction revenues (classifieds, advertising, shopping.com) continue to be on fire, with growth accelerating to 56% Y/Y in Q1. This group now accounts for 15% of Marketplaces revenue, up from 11% in Q1 last year.[47]
We reported $701 million of non-GAAP operating income, up 18% from last year, and non-GAAP net income of $562 million, up 22%.[27] On a sequential period, net revenues for the three- month period ended March 31, 2008 were positively impacted by foreign currency translation of approximately $27 million.[40] In Q2, we expect to generate net revenues of $2.1 billion to $2.15 billion, and we anticipate non-GAAP EPS in the range of $0.39 to $0.41.[27] Net profit climbed 22% to $459.7m from revenue up 24% at $2.19bn.[28]
Profits will eventually plateau as sellers move away and eBay has exhausted new ideas and revenues streams.[16] During that time, eBay has embraced an exciting new mindset. More than ever, we are focused on making eBay more appealing to buyers while giving sellers the tools and support they need to thrive.[27] At the time, Whitman talked of using Skype to connect eBay buyers and sellers through Internet phone calls.[30]
"We may have sellers that make some noise and pull some items, but we're absolutely confident we'll improve the buyer experience, and that will make a better and more vibrant EBay,'' Donahoe said in a conference call with analysts and investors.[34] The three areas eBay is focused on are improving trust, making finding easier, and expanding selection. In answering questions from Wall Street analysts, Donahoe said he did not anticipate running an advertising campaign to tell shoppers about the improved buyer experience on eBay.[50]
Chief Executive Officer John Donahoe, who replaced Meg Whitman on March 31, is trying to improve buyers' experiences to compete with Amazon.com Inc. as an all-purpose online store. "Essentially, they're doing the small things right and sticking to their knitting,'' Jeffrey Lindsay, an analyst with Sanford C. Bernstein & Co. in New York who recommends buying the shares, said yesterday.[37]
The EPS figure came in ahead of the $.39 per share that analysts were expecting, though the effect of the weak dollar contributed an additional $110 million to the top line.[48] Earnings per share are expected to come in at 39 cents -- up from the 33 cents a share reported last year.[10] Excluding one-time items, it expects earnings per share between 39 cents and 41 cents in the second quarter.[1]
It's been a busy quarter for eBay, highlighted of course by the naming of John Donohoe as Meg Whitman's successor, but investors are focused more on share price than who's sitting in the C-suite.[6] During the quarter, we opportunistically repurchased approximately 3% of eBay shares outstanding," said Bob Swan, eBay Inc. CFO. "We are seeing some positive early indicators based on our key initiatives, but there is still much work to be done.[40]
From their initial IPO eBay's share were the darling of the Nasdaq. They rose srtongly and consistently. The day eBay bought Skype their share price went through the floor. It has never recovered. Just as well Meg Whitman is already leaving, they really should have fired her a long time ago.[11]
Okay I'll bite. Ebay moved away from it's core business by acquiring Skype in the first place. It's not supporting their core business so it only makes sense to spin the business unit out into it's own business probably via public stock offering, thus infusing ebay with a bushel of cash.[11] The auction house has already written off $1.4bn relating to the purchase. It has failed to integrate the technology into its core auction business, and although Skype continues to pick up users, it is still struggling to find a way to make much cash out of them.[25] Now with 309 million registered users, Skype has the largest registered user base in eBay's entire portfolio.[41] Skype added 33 million new users in the quarter and now has 309 million worldwide.[36] Active users for the quarter rose 1% from the previous quarter to 82.9 million, while the number of new listings were up 4% from the previous quarter to 588.5 million.[23] New users rose a tepid 1% from last quarter to 82.9 million, souring an otherwise upbeat release.[36]
EBay has no plans to boost advertising spending in order to drive new users to the site. Instead he described a small initial effort to offer coupons to top buyers to reward them for shopping on eBay.[39] NEW YORK (Dow Jones) -- EBay Inc.' s (EBAY) first-quarter net income jumped 22% as the online auctioneer boosted its full-year outlook amid what it called "strong" results that topped expectations.[21] EBay fell as much as 5.8 percent in Nasdaq trading as the online retailer said the slowing U.S. economy may affect results.[37]
"Interest earned on certain PayPal customer account balances." I see eBay's stock rising daily and wonder when the other shoe will drop. With so many sellers leaving or boycotting, their has to be a negative result showing somewhere. I would like to see a full list of all of eBay's subsidiary companies and affiliates so that I can stay away from all of them.[16] Then secondly, could you talk about the drivers behind the lower transaction loss rate at PayPal? Thank you. Doug, let me take your first one and all the product people at eBay are going to laugh at this one because it'''s a little dangerous when the CEO starts taking out a product mock-up and talking about it.[27]
I believe 2008 will be PayPal's best year yet, especially as we continue to innovate around ways for PayPal and eBay to work even more closely together to drive a great buyer experience.[27] Back in January, I was very explicit that we are extremely focused on improving the buyer experience on eBay. This is not to say that sellers are not important to us but our belief is and always has been that what is good for buyers is ultimately good for sellers, and this successful balancing of the ecosystem is what makes for the most healthy and vibrant marketplace.[27] Sellers are also no longer allowed to post negative comments about buyers, although buyers may still post criticism about sellers. EBay has jiggered its search so that sellers with poor ratings fall to the bottom while those with good ratings rise to the top. Such moves prompted a boycott by sellers in February, however, eBay has claimed that it has felt no impact from it. In January, longtime CEO Meg Whitman said that she would step down after serving almost a decade at the helm.[5]
The number of eBay stores dropped sharply in the middle of last year when eBay raised seller fees. [3] The number of eBay stores as of March 31 was 547,000, up 3% from 532,000 in the fourth quarter of 2007 but down 13% from 632,000 a year ago.[3] Ebay ( EBAY ) reported another incredible quarter ( see earnings release and management presentation here and the conference call transcript is here ).[47] Thank you, Mark and welcome, everyone to today'''s conference call. As you know, this is my first earnings call as eBay's CEO and I am excited to be here.[27]
While there is still a lot more work to do, I am confident that eBay is reinventing itself in exhilarating new ways that will strengthen the growth of our business and lead to an even more exciting future. [27] You have a thriving subsidiary with strong growth but it isn't sufficiently enmeshed with your core business to make you happy as the CEO or eBay.[11]
TPV growth was fueled by increases in GMV coupled with a 220 basis point increase in the global penetration rate on eBay to 54.5%.[27] eBay profits up despite slower growth in users - BizTech - Technology Welcome to The Sydney Morning Herald.[13] EBay may be affected as electronic commerce growth slows, Chief Financial Officer Robert Swan said Wednesday.[37]
Stock-based compensation expense. This expense consists of expenses for stock options, restricted stock and employee stock purchases under Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment." eBay excludes stock- based compensation expenses from its non-GAAP measures primarily because they are non-cash expenses that eBay does not believe are reflective of ongoing operating results.[40] Employer payroll taxes on stock-based compensation. This amount is dependent on eBay's stock price and the timing and size of exercise by employees of their stock options and restricted stock, over which management has limited to no control, and as such does not correlate to eBay's operation of the business. Amortization or impairment of acquired intangible assets and impairment of goodwill. eBay incurs amortization or impairments of acquired intangible assets in connection with acquisitions. eBay excludes these items because they arise from eBay's prior acquisitions and have no direct correlation to the current operating results of eBay's business.[40] Free cash flow represents operating cash flows less net purchases of property and equipment. eBay considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property, buildings, and equipment, which can then be used to, among other things, invest in eBay's business, make strategic acquisitions, strengthen the balance sheet and repurchase stock.[40]
"By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in Internet voice communication, we will create an extraordinarily powerful environment for business on the Net."[30]
There is plenty of areas where knowledge from ebay would be useful in setting up a new project with skype & paypal.[11] Why sell it? If i was in the trade of making silver, and then one day i buy a magic pot that makes gold, id keep the bot, let it cary on making gold, and id keep making silver. This has the bonus that if someday i fancy making silold or gilver i can. Plus ebay doesnt go great with skype but paypal does, why dont they just keep sticking paypal to stuff.[11]
EBay named Josh Silverman, who ran the company's Shopping.com division, as Skype CEO on Feb. 25.[33] A sale of Skype has been rumored for several months and, reading between the lines, is not incompatible with EBAY's report.[47] Very little color was given on Skype, except to say EBAY are once again going to explore integration with Marketplaces and Payments. I personally think this is just the standard official response and that it'''s certainly not a priority anytime soon.[47] Okay, great. Just in terms of the first question and a clarification -- I'''m a little new to this game but hypothetically, all else equal, I would have thought that a marketplace business such as yours would be a little less cyclically exposed than the payments business. I think what we'''d say is that we like being in a marketplaces business at this particular time in the cycle, because as I said earlier we think the marketplace has some unique characteristics, being a global trading platform for cross-border trade and also being a place where we have great deals and assets to cash in seven days.[27] John highlighted the changes we will be making, including steps to improve trust, make finding easier, and expand selection, all of which may introduce volatility into our business over the next few quarters. For instance, one such initiative he discussed, safer payments in Australia, may negatively impact short-term GMV in that market. Our guidance captures this volatility, a higher level of investment, and our cautious view on the economy.[27]
Gee Bill, you must be a powerseller. Isn't that what these changes were all about? Aren't powersellers the only sellers with whom eBay spoke about the proposed changes? I'm sure eBay will be very proud to hold you up as a fine example of how their stategy is working. I'd like to know if any of the smaller sellers can boast those percentages. At this point, I'm not interested in how powersellers are doing.[16] I am encouraged by the direction the metrics are headed. We believe these positive indications tell us that eBay is in fact becoming easier and safer to use. I am also pleased by the e-mails I'''m receiving from sellers telling me that they have seen their businesses accelerate due to the changes we'''ve made.[27] Previous changes have angered sellers, some of whom have attempted to organize boycotts of EBay.[34]
We remain committed to making the necessary changes that will make eBay easier and safer and we intend to make additional changes throughout the year. These include innovations that will work to improve trust, enable a better finding experience for our customers, and expand selection of inventory in a uniquely eBay way.[27] Oh well! It IS an election year. ''There are no plans to go to a PayPal-only model for eBay in the U.S. and we haven't announced any other markets at this time.''[16] Benefiting from a weak dollar, eBay Inc. beat Wall Street's expectations on Wednesday, reporting a 22 percent boost in first-quarter profit and raising its outlook for the rest of the year.[22] Aside from the top and bottom lines, analysts will be paying very close attention to some other key metrics, most notably the GMV, or gross merchandise volume, in the U.S. Last year, the category grew between 5 percent and 8 percent.[6] We announced last year a product called PayPal Later -- PayPal Pay Later, rather, and that'''s a transactional line of credit which allows merchants to offer flexible and customized financing options to buyers at the point of sale, even if the buyer doesn'''t have a PayPal account. We are partnered with GE on this.[27] I think the question was PayPal transaction margins and yeah, we as I indicated a bit earlier, David, we began to accelerate the margins in PayPal in the fourth quarter of last year, where we began to see some of the benefits from the investments we'''ve made over the last couple of years.[27] Segment margins for the quarter came in at 23%, up 180 basis points from last year, as we continue to benefit from the investments we made in 2006 and 2007.[27]
Q3 -- Q4 accelerated year-on-year and Q1, we saw a pretty good acceleration versus the same quarter last year.[27] GAAP operating margin decreased to 25.2% for the quarter, compared to 26.5% for the same period last year.[40]
Analysis Will U.S. rates hit zero? Japan had 0% rates for six years. Comment The Bank fails us by its weakness The Bank of England's quarter point interest rate cut looks inadequate, says the Daily Mail City Editor.[28] You mentioned modest downward impact to take rates from listing changes over the course of the quarter, but when you look at the numbers it seems like take rates were down only slightly. Then, any additional color on the U.S. and the U.K.? Are you seeing slower traffic? Should we think about it in terms of lower potential conversion rates, purchasing of lower ASP goods, and any specific weakness to verticals in terms of those markets? Thanks.[27] Let me first address the first. You know, it'''s only been about six weeks since the changes we announced have gone into place, so that the rebalanced pricing took effect in the U.S., Germany, and the U.K., that the incenting sellers to provide good buyer experience in the form of seller discounts and exposure and search, and increasingly exposing best match search to those. In both the U.S. and U.K., we'''re encouraged by the early results.[27]
Average DSRs have shown signs of improvement. Buyers are telling us that sellers are communicating with more detail and more accuracy, and average shipping costs in the U.S. are 2% lower since we announced that seller discounts would be tied to these measures. This tells us that sellers are really applying themselves to making customer satisfaction a competitive advantage on eBay.[27]
Donahoe "has pushed forward things for the benefit of the buyer, which is essential to EBay's future, by addressing issues of fraud and buyer discomfort.''[37] John Donahoe, who previously ran eBay's Marketplaces division, replaced Whitman on March 31.[5] "I anticipate a year that's going to be a fairly vocal year because I think we are going to make a number of changes," Chief Executive John Donahoe told The Associated Press Wednesday, adding that the company could have handled concerns better.[1] The company's global portfolio of classifieds businesses reported a 101% increase in unique visitors year over year, with an average of 70 million monthly unique visitors.[16]
Halliburton is mulling a counterbid for Britain's Expro International, sources close to the situation said on Friday, after the oil services company agreed to accept a 1.605 billion pound ($3.17 billion) bid from funds managed by private equity firm Candover and investment bank Goldman Sachs. Expro added in its statement that another party, which had been given access to its books, continued to conduct due diligence. [45] The number of active accounts clocked in 17% higher, yet the total payment volume soared by 34%, to $14.4 billion.[35]
The company's PayPal unit, an online payments processor, saw revenue rise 32% as total payments volume grew 34%.[21] The online company is also linking search results to seller ratings and experimenting in Australia with making PayPal a required channel for payment.[34] In Australia, the company is testing a programme which means sellers are only able to accept PayPal payments.[19] In Australia, the company is testing a program that requires sellers to accept only PayPal payments.[16]
John, I think eBay is an investor of a company called and they had some great success with the installment payment on market platform. [27] Total payment volume, or TPV, on the eBay global platform was up 17% and merchant services TPV was up 61%. These figures are impressive and we believe there is even more potential for eBay to expand both on and off eBay.[27] It still mystifies me as to why eBay, an auctioneer and item dealer, would want Skype, a telephony service.[11] Skype now has the largest registered user base within eBay Inc.' s portfolio of businesses.[40] Skype added 33 million registered users in the quarter, ending the period with more than 309 million registered users around the world.[40] The service now has 309 million total registered users, having added 33 million in the quarter.[48] The internet-telephony service gained 33 million registered users during the quarter.[41]
Net revenues generated outside the U.S. were 55% of total Marketplaces net revenues for the quarter. [40] In the new classification, transaction revenue represents fees earned from marketplaces GMV, PayPal TPV, and telecom offerings.[27] Marketing services and other primarily includes revenue earned from advertising, shopping.com lead generation fees, third-party services, as well as interest earned on certain PayPal account balances. I'''ll talk more about this later.[27] The seven point gap between GMV and revenue is largely driven by marketing services growth of 56%.[27] We generated strong revenue growth, even stronger earnings growth and excellent free cash flow.[40]
The figures surprised Wall Street, which had been predicting revenue of USD2.08 billion for the quarter.[38] We continue to gain traction in our text and graphical ad business, which posted 151% revenue increase for the quarter.[27]
Free sites''such as''Craigslist have been around for years, and cheaper auction outlets''such as ''Overstock.com (Nasdaq: OSTK ) and Amazon.com (Nasdaq: AMZN ) have never made much of a dent. EBay.com is a shell of its former self, even if 55% of its revenue is now coming from outside the United States.[35]
Online auctions were nice, but there no point putting all your eggs in the one basket, gumtree/facebook, is becoming a convenient way to get rid of junk without the haste of ebay, on-line shops are getting competitive, and froogle is getting good at finding what you want.[11] IMO, pay"pal" would be far better of as bankrupt. That's precisely where they were headed before eBay bought them. Astonishingly, eBay turned them around. Which is not to say that this is a good thing.[11]
EBay shares are up more than 22% since mid-March on positive analyst reports and ratings.[36] Earnings rose by 22% to $0.34 a share, or $0.42 a share on an adjusted basis.[35] We accelerated GMV growth for the second quarter in a row and continued to gain share in a highly competitive market.[27] The EPS performance was driven by a stronger-than-expected top line growth, a lower tax rate, benefits from a weaker U.S. dollar, and a lower share count.[27]
The trendline for U.S. GMV was pretty stable during the course of the quarter and as John indicated, we saw some momentum from the initiatives that we launched towards the end of February. That being said, some of our growth in GMV was from very -- from strong cross-border trade and we saw towards the end of the quarter as we try to isolate cause and effect between the initiatives we were seeing and the overall economy and the impact.[27] "Some of the growth came from strong cross border trade, but we also saw a slowing in the buyer's propensity to buy towards the end of the quarter."[23]
On books, music and video, on media, we think frankly the category based pricing made a big impact, and so the fact that we lowered fees and rebalanced pricing there in a category specific way had an increase in listings combined with better finding and the other changes, buyer changes we'''ve made has resulted in higher successful items and higher GMV growth.[27] We are encouraged. Again, it'''s early days but these are the kinds of fundamental changes we want to be making across all of our categories and we think they will add up to a better buyer experience and better growth.[27]
Our stability and growth continues to give us the confidence to make innovative changes to our products to keep customers engaged for years to come."[40] Global listings growth improved to 10% year over year, while conversion rates declined only slightly.[27]
Donahoe talked about the category-based pricing in the media category, and said listings have increased, while conversion rates (percentage of listings that sell) declined slightly. He said with Best Match, conversion rates should go up over time, because Best Match looks at historical data on key search terms. The conference call was the first for Donahoe in his new role as President and CEO; he's had a low profile since taking the reigns from Meg Whitman on April 1, granting few - if any - media interviews.[50] "I think in (the first quarter), we did a good job, not a great job, in the way we engaged with our community," Donahoe said.[1] The non-GAAP effective tax rate for the quarter was 23% compared to 26% for the first quarter of 2007.[40] During the first quarter, valuations of our sub-prime related exposures in fixed income markets and leveraged finance assets have further declined and credit costs in our consumer lending businesses have increased,''' Citi CEO Vikram Pandit.[45]
Obviously we have been doing better marketing on the site. The best match has been helping somewhat (I believe but there are no metrics available at this time to be able to pinpoint that) but sales have been up on all 3 months so it is not just the best match. It will be interesting to see what the next quarter brings. [16] In the quarter, our Skype marketing team developed a fantastic partnership with Oprah Winfrey. For all of you Oprah fans, you know that she now uses Skype video to have on-air conversations with her guests during her hugely popular TV show and via her online webcast series. Clearly this has been a big win for the Skype team.[27]
In the U.S., a recent study showed that 25% of online U.S. retailers now accept PayPal, including many major retailers like CompUSA and Jet Blue Airlines, which we added during the quarter.[27] With only 31 of the top 100 online merchants in the U.S. offering PayPal, there is still an amazing amount of headroom left. On-EBAY penetration rate continues its steady increase, and at 54.5%, also has plenty of room for further gains.[47]
Several factors inflated the numbers, like a lower tax rate and favorable currency translations, but it was still a good quarter, especially for PayPal fans. It's hard not to love PayPal.[35] "While we view Beat & Raise quarters as providing good long trading opportunities, the important background factor here is that the company's initial '08 guidance appeared aggressively conservative from the start," Citigroup analyst Mark Mahaney wrote in a note to clients in the past week.[10] "This was a very strong financial quarter for the company," he said.The results reflect the strength provided by our diverse portfolio of businesses.[42] In addition to the corresponding GAAP measures, eBay's management also uses the foregoing non-GAAP measures in reviewing the financial results of eBay.[40]
Make no mistake, though: eBay is setting itself up for a pitched battle with Amazon as the net's online marketplace.[6] Marketplaces continues to focus on customer-facing initiatives designed to make transactions on the eBay platform safer and its various global sites easier to use while enhancing selection in a uniquely eBay way.[40] With enough powerful subordinates to pick up any slack from eBay's namesake site coasts, the auction maven's certainly still breathing.[35]
Since the time our pricing changes took effect six weeks ago, we have seen measurable improvements in listings, sold items, and GMV in our three largest markets. We are also seeing early progress from best match, which is just rolling out in the U.S., Germany, U.K., and France, where there appears to be finding the right product from the best sellers is getting easier on these sites.[27] A South Korean consortium has agreed to invest $246 million in the El Boleo copper-and-cobalt project in Mexico by buying a 30 percent stake held by Canadian firm Baja Mining, a member of the group said. Husky Energy Inc said it has agreed to sell a half interest in an Indonesian natural gas field to China National Offshore Oil Corp for $125 million in order to speed its development. Nokia, the world's top cellphone maker, said it is selling its subsidiary Identity Systems to U.S. data integration software provider Informatica Corp for $85 million cash.[45] During Q1, PayPal processed an average of $158 million of TPV each day, which translates into over $6.6 million of TPV per hour. This gives you some idea of the large amount of volume flowing through the PayPal system on any given day.[27]
Growth was once again propelled by PayPal and in particular merchant services, Skype, classifieds, and advertising.[27] Our global payments business continues to strengthen and PayPal is one of the key pillars of our company-wide growth strategy.[27]
Citi expects 29 percent growth on the quarter, but anything under 27 percent would be viewed negatively.[6] U.S. GMV under 5 percent growth, bad; 5 - 7 percent, neutral; over 7 percent, good.[6] The growth was hurt by the economic environment in U.S. and U.K, the company said.[23] The company's growth has slowed amid mounting competition from e-commerce sites like Amazon.com.[51]
Most analysts were expecting active user growth of 5% to about 87 million users.[23]
Looking forward, the company expects second-quarter per-share earnings of 39 cents to 41 cents, compared with analysts' forecast of 40 cents.[21] Excluding items, the company recorded per-share earnings of 42 cents, compared with 33 cents a year earlier.[21]
I'''ll give you a few closing thoughts before turning it over to Bob for more detail on the quarterly figures and our outlook for the full year. In January, at the time of my appointment as CEO, I told you that I believe this company had an incredibly strong portfolio of businesses and an excellent 13-year track record.[27]
If the results don't pan out, the company would take a new look at the situation. This could lead to selling Skype, the report said.[26] That's good news, but a lot of the credit has to go it its PayPal and Skype acquisitions, which have both performed exceptionally well.[42]
Q. I read in the Financial Times that we may sell Skype. That if the synergies are strong, we'll keep it in our portfolio. If not, we'll reassess it. We have no plans to sell Skype. and why would we? As I said in the story, it's a great business with a great purpose -- enabling the world's conversations.[11] The plan to consider selling Skype was first reported by Britain's Financial Times.[33]
All in all, we delivered strong financial performance for the quarter and feel good about the solid start to 2008. [27] We'''ll go next to Jeetil Patel with Deutsche Bank. A couple of questions -- I guess can you talk about what have you learned from buyers and their behavior in terms of the response to the couponing that you did throughout the quarter, or I think during the major changes you made, as well as best match.[27] Sales and marketing improved 100 basis points from a year-ago period, due in part to a more efficient online marketing spend and in part through investments in buyer loyalty and retention, some of which get recorded as contra revenue instead of expensed to sales and marketing.[27] In Europe, our merchant services business continues to accelerate, where we'''ve seen PayPal drive incremental sales of up to 5% for our largest merchants.[27]
Cable operator Charter Communications Inc., which provides television, Internet and telephone services, spent $700,000 in 2007 to lobby government on hig. Northwest Airlines said it would boost the payout for Chief Executive Doug Steenland if he stays until the carrier finishes its combination with Delta Ai.[20] Dot-com heavies''such as ''Google (Nasdaq: GOOG ) and Yahoo! (Nasdaq: YHOO ) -- and even banking giants''such as ''Citigroup (NYSE: C ) and Wells Fargo (NYSE: WFC ) -- have tried to take on the online-payment service over the year, with humbling results.[35]
SOURCES
1. The Associated Press: EBay CEO sees more change ahead after profitable 1st quarter
2. EBay adjusted 1Q earnings, revenue top expectations
3. InternetRetailer.com - Daily News for Thursday, April 17, 2008
4. Buy It Now? eBay profit hike cheers investors - Banking, Financial Services & Insurance - Management Today
5. eBay Steps to the Plate | Internet | AMZN EBAY GOOG INTC - TheStreet.com
6. EBay's Earnings Challenge: "Beat And Raise" For Investors - Tech Check with Jim Goldman - MSNBC.com
7. IBM's outlook up after earnings jump 26% | courier-journal | The Courier-Journal
8. eBay Beats the Street; First-Quarter Profit Jumps 22%
9. Free Preview - WSJ.com
10. UPDATE: EBay Earnings Expected To Grow With More Listings
11. Slashdot | eBay Mulling Skype Sale
12. eBay considers selling Skype - Web User News
13. eBay profits up despite slower growth in users - BizTech - Technology
14. EBay's Q1 profit up 22%, beats estimates - Silicon Valley / San Jose Business Journal:
15. eBay's first quarter, outlook solid | Between the Lines | ZDNet.com
16. eBay Profits up 22 Percent in First Quarter 2008
17. eBay: Did listings change make a difference? | Between the Lines | ZDNet.com
18. IBM, eBay: The Boost from Overseas
19. Marketing News: Ebay blossoms but chief pledges brand review - Marketing Week
20. EBay Posts 22% Quarter Profits - International Business Times -
21. EBay Net Jumps; PayPal, Skype Surge (eBay Inc. (EBAY)) at SmartMoney.com
22. Bay Area firms show mixed results in quarter / EBAY: 22% profit boost posted, outlook beats Street expectations
23. Weak User Growth Keeps Lid on eBay | Technical Analysis | ALTR EBAY GE GOOG IBM INTC NOK - TheStreet.com
24. EBay Reports 1Q Profits Rose 22 Percent | April 19, 2008 | AHN
25. eBay ponders Skype bail out | The Register
26. EBay weighs selling Skype - Breaking News - Business - Breaking News
27. eBay Q1 2008 Earnings Call Transcript - Seeking Alpha
28. EBay gets boost from PayPal and a sliding dollar | This is Money
29. eBay May Sell off Skype Later This Year
30. TECH CHRONICLES / A daily dose of postings from The Chronicle's technology blog (sfgate.com/blogs/tech)
31. eBay May Sell Skype | WebProNews
32. Ebay to mull Skype sale if synergies not strong: report | Deals | Reuters
33. EBay may consider selling Skype phone division - Los Angeles Times
34. Bloomberg.com: Worldwide
35. eBay: Life After Meg
36. EBay Handily Beats Q1 Estimates, Raises 2008 Guidance
37. EBay earnings beat analyst estimates | APP.com | Asbury Park Press
38. ENN - eBay sees revenue jump, raises outlook
39. EBay says buyer activity slowed in March | Markets | Markets News | Reuters
40. eBay Inc. Reports First Quarter 2008 Results
41. eBay bolstered by Skype and PayPal results - ZDNet.co.uk
42. eBay Posts Strong First Quarter Figures - Computing News - Digital Trends
43. Numbers: Skype Reports $126M Revenue, 33M New Subscribers in Q1
44. Ebay records 22% rise in Q1 net profit - Telecompaper
45. DealZone » Blog Archive » Bad news is good news | Blogs | Reuters.com
46. telecoms.com
47. eBay Reports an Outstanding Q1 - Seeking Alpha
48. Earnings: eBay Q1 Revenue Up 24 Percent; Net Income Up 22 Percent | paidContent.org
49. EBay sees higher results despite weak US/UK demand | Reuters
50. eBay Announces Earnings, Answers Analyst Questions
51. EBay CEO sees more change ahead after profitable 1st quarter | Newsweek Technology | Newsweek.com
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